Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of Sir John Stradling Thomas, Knight, Member for Monmouth, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Oral Answers to Questions — SOCIAL SECURITY

Family Benefits

Dr. Twinn: To ask the Secretary of State for Social Security what is the annual spending on family credit; and what was the spending on family income supplement in 1979.

Mr. Alison: To ask the Secretary of State for Social Security what is the annual spending on family credit; and what was spending on family income supplement in 1979.

The Parliamentary Under-Secretary of State for Social Security (Mr. Michael Jack): I am pleased to be able to tell the House that we estimate that in the financial year just ended expenditure on family credit will have been £484

million. That is 20 times in cash terms, or eight times in real terms, the expenditure in 1978–79 on family income supplement of £24 million.

Dr. Twinn: I very much welcome my hon. Friend's reply, which shows the real increase in spending. I know that he will share the concern of the House about those who are not taking up benefit for which they qualify and I congratulate him on the advertising campaign. How successful has it been so far?

Mr. Jack: I thank my hon. Friend for his kind words about our campaign. In the television campaign we have drawn attention to the message in the front of the child benefit book which shows what people could receive in the form of assistance through family credit. That is a cost-effective way of reaching 6·7 million families. The success can be judged from the fact that after five weeks of the campaign there has been a 17 per cent. increase in the number of inquiries about family credit over the figure for the five weeks before the campaign started.

Mr. Alison: Does my hon. Friend recall that when the predecessor of family credit, the family income supplement scheme, was started by the then Sir Keith Joseph in the early 1970s, the Labour Opposition promised to abolish it? Against that abolitionist background, does he recognise that the Labour party has not the slightest hope of matching, let alone improving, the quality and calibre of family credit as it operates today?

Mr. Jack: My right hon. Friend, in his perceptive way, has put his finger on a series of exchanges in the recent Budget debate, when my right hon. Friend the Secretary of State drew the attention of Opposition Members to the fact that the Opposition's policy on the uprating of child benefit meant that people on family credit would receive no additional payments—unlike under our much more generous approach to the problem.

Mr. Frank Field: How much would the increase in family credit have been had the Government increased child benefit during their 11 years in office in line with prices?

Mr. Jack: The hon. Gentleman seeks to highlight a most important point: the fact that people on family credit will, of course, receive the full value of the uprating of child benefit in April.

Mr. Kennedy: Will the Minister conduct an urgent review of staffing levels for handling family credit in Blackpool? He will know that, like many other hon. Members, I am in regular correspondence with his Department about the massive delays encountered by people trying to secure family credit, not least by those in the self-employed category, in the evaluation of whose applications more attention to detail is involved.

Mr. Jack: We in the Social Security Department do not have to wait to be prompted on these matters by questions in Parliament. The hon. Gentleman will find that the target met in March—17 days to deal with family credit applications—exceeded by one day the target that was set. He will also know, if he had time to read the newspapers during the recess, that the Benefits Agency was launched last week, with a commitment to a high quality of public service. I am sure that any remaining problems relating to family credit will be one of Mr. Michael Bichard's first priorities.

Sick and Disabled People

Sir Anthony Meyer: To ask the Secretary of State for Social Security what is the most recent figure for the increase in spending on benefits for long-term sick and disabled people since 1979.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott): We have increased spending on long-term sick and disabled people by £5·6 billion in real terms over the last 12 years, to over £10 billion a year.

Sir Anthony Meyer: Does my right hon. Friend agree that one of the most encouraging aspects about his reply was not just its proof that the Government have done far more for the long-term sick and disabled than the Labour Government ever did, or than the Opposition seem to be planning to do, but that the Government are boosting the morale of those people by making it more possible for them to earn their living and go out into the world?

Mr. Scott: I agree with my hon. Friend. The Government have spent an extra £470 million in real terms per annum compared with £310 million in real terms during the period when Labour was in office. That is ahead of the full implementation of our proposals in "The Way Ahead" which will aid another 850,000 people at a cost of an extra £300 million in 1993–94.

Mr. Tom Clarke: How much of that money was obtained from the savings that the Government achieved as a result of the shameful decision announced with the minimum of publicity by a junior Minister in another place not to implement the remaining sections of the Disabled Persons (Services, Consultation and Representation) Act 1986? That decision has shocked organisations of and for disabled people. Since the Secretary of State had much to do with the drafting of those sections, will he assure him that that anger will not go away?

Mr. Scott: The 1986 Act was passed in circumstances very different from those that exist today or are in prospect when the main responsibility for care in the community,

the representation of disabled people and the meeting of their needs passes to local authorities and is properly within their remit.

Mr. Jacques Arnold: Does my right hon. Friend agree that one of the most important aspects is to ensure that disabled people and others get the benefits to which they are entitled? Can he give the number of people who have taken up mobility and attendance allowance in recent years?

Mr. Scott: Those figures have increased dramatically, but we are still not satisfied with the arrangements for paying disabled people the benefits to which they are entitled. I recently announced that from June the benefits inquiry line, which we have been piloting in Reading in recent months, will be introduced nationally. Those who think that they are entitled to a benefit will be able to telephone a trained operator and receive a personal letter advising them of their entitlements. Many of them will be able to get a completed application form for their signature.

Mr. Alfred Morris: Is the Minister aware that the increased spending about which he spoke relates, almost entirely, not to higher benefits but to new recipients of benefits that were introduced by this Government's predecessors? Will he confirm that since 1979 average earnings have gone up by more than 20 per cent., but disability benefits by only 1 per cent? Is not that why huge numbers of disabled people complained so bitterly to the Prime Minister at his recent meeting with their organisations? Does he intend to accept the Lords amendment to his Disability Living Allowance and Working Allowance Bill on the future of the independent living fund?

Mr. Scott: The right hon. Gentleman asks a number of questions. First, the extra resources have been found and, for example, our commitment for 1992 to introduce the disability working allowance from the starting date of the legislation compares favourably with the slow, gradual and uncertain introduction of the mobility allowance by the previous Labour Government. Since we came to office we have found the extra resources to deal with the increased take-up of benefits right across the board. The right hon. Gentleman asked about the future of the independent living fund. We have announced extra resources for that and the long-term future will have to take account of the duties that will flow to local authorities after 1993.

Pensioners (Savings)

Mr. Stern: To ask the Secretary of State for Social Security what percentage of pensioners retiring (a) in 1979 and (b) in 1987 had incomes from savings; and what was the real average level of savings on each of those two dates.

The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe): My hon. Friend will be pleased to hear that, in 1987, 75 per cent. of recently retired pensioners had income from savings compared with only 65 per cent. in 1979. The average real level of savings for this group was about four times as high in 1987 as it had been in 1979.

Mr. Stern: I congratulate my hon. Friend on that announcement, which confirms the very real increase in the standard of living of pensioners over the past decade. Does my hon. Friend agree that perhaps the greatest danger to the record figures that she announced would be a resurgence of double-figure inflation of the type experienced under the last Labour Government? Does she further agree that the greatest threat of such inflation comes from the grandiose spending plans of the Labour party?

Miss Widdecombe: My hon. Friend is absolutely right and one need only look at the record of the last Labour Government to see how right he is. During their time in office, pensioners' average income from savings fell by 16 per cent., which was the equivalent of about 3·4 per cent. each year. By comparison, under this Government, pensioners' average income from savings has increased by 130 per cent.

Mr. Andrew F. Bennett: If the Government are claiming credit for those figures, will they also take responsibility for blighting the lives of many of the pensioners in my constituency who have been put out of work in the past 10 years because of the previous Government-created recession and have found themselves, at the age of 55 or 56, unable to get other jobs and having to retire on basic benefits with no savings at all? When will the Government compensate people who were asked to sacrifice their jobs for the prosperity of the country?

Miss Widdecombe: It is odd that the hon. Gentleman castigates the Government for people retiring on basic state pensions, because the number now retiring with occupational pensions has risen to 77 per cent. in real terms. Therefore, the hon. Gentleman is on weak ground. Pensioners' incomes have increased steadily under this Government, from benefits, occupational pensions and savings. The total increase in income is 31 per cent. The hon. Gentleman should look to the record of the previous Labour Government.

Mr. Paice: Does my hon. Friend agree that the lesson to be learnt from the admirable figures that she described to the House, in terms of savings and occupational pensions, is that any extra resources that can be channelled to pensioners should not be dissipated across all pensioners but targeted to those reliant only on state pensions and those most clearly in need of extra income?

Miss Widdecombe: My hon. Friend is right and that is why my right hon. Friend the Secretary of State has been targeting help in that fashion. Recently, we announced increases to the value of £200 million in a full year, devoted specifically to less well-off pensioners. From April 1991, a further £80 million has been devoted to exactly that category. My hon. Friend is right that we can do more for poorer pensioners if we specifically target them.

Mr. Allen: The Minister will be aware that, because of the increase in pensions paid for the first time last week, married couples under the age of 75 now receive lop more than the income support limit. That means that they will be unable to claim benefits such as free dental inspections, free eye tests, European Community food mountain subsidies which allow pensioners free meat and so on—

Mr. Dickens: The gravy train.

Mr. Allen: —access to the social fund and cold weather payments. The hon. Member for Littleborough and Saddleworth (Mr. Dickens), who calls that the gravy train, should be ashamed of himself. Did the Government realise that that 10p rise over the income support level would have such an effect? If not, what will they do to help those people?

Miss Widdecombe: The hon. Gentleman will be aware that, as a result of that rise in the basic retirement pension for the category of people whom he mentions, the retirement pension has now risen above the level of income support, so they now receive additional resources each week. He should also be aware that such people are still eligible for national health service benefits, as they are for housing and community charge benefits. Their total income should, therefore, not be eroded.

Disabled People

Mr. Summerson: To ask the Secretary of State for Social Security if he will make a statement about the impact of recent technological developments upon the disabled.

Mr. Scott: Recent. current and future technological developments are making and will continue to make an increasing impact on the lives of disabled people. They will enable many disabled people to live independently and to have opportunities for education, employment and leisure. They will also play an important part in the detection, prevention and amelioration of disabling conditions.

Mr. Summerson: Will my right hon. Friend confirm that, wherever possible, money is made available by his Department to ensure that disabled people who cannot afford that new technology are enabled to afford its benefits?

Mr. Scott: I agree with my hon. Friend. We want those developments to be made available on as wide a scale as possible. Clearly, priorities will have to be made about the development and availability of new technology. But we are moving in the right direction and in the next 10 years technology will make a greater impact than anything else on the lives of disabled people.

Mr. Thurnham: Does my right hon. Friend recall his visit three years ago to the disabled living service centre in Manchester, which has a unique display of devices to help the disabled? Does he recognise the national importance of that centre, which is funded almost entirely by charity?

Mr. Scott: I certainly recognise that and there are a number of other centres around the country that also play an important part in enabling disabled people to see what is available to them. I am concerned that we should exploit information technology to the greatest extent possible so that social services departments, voluntary agencies and disabled people can find out, by using the telephone or other instruments of information technology, what is available to them.

Claimants

Mr. Sims: To ask the Secretary of State for Social Security what measures the Government are implementing to improve their level of service to social security claimants.

Mr. Lester: To ask the Secretary of State for Social Security what measures the Government are implementing to improve their level of service to social security claimants.

The Secretary of State for Social Security (Mr. Tony Newton): The creation of the Benefits Agency under the "next steps" arrangements is an important development which will enhance and improve the service given to social security claimants. It will be able to build on other measures already being introduced, including, in particular, the extensive use of information technology.

Mr. Sims: I thank my right hon. Friend for that encouraging reply. The sheer size of the social security organisation and the number of beneficiaries make it inevitable that errors will occasionally occur. What is annoying for our constituents is that, when something goes wrong, it takes so long to be put right—phone calls receive no response, letters go unanswered and papers go astray —and constituents often turn to their Members of Parliament to get a relatively simple matter put straight. Will my right hon. Friend assure me that his proposals for the agencies will speed up the methods of dealing with the occasional mistakes that are bound to occur?

Mr. Newton: Like any other Member of Parliament, I am familiar with the sort of criticism made by my hon. Friend. I well recognise that there has been substantial scope for improvement. If my hon. Friend looks at what has happened to, for example, income support clearance times and the speed of reassessment, when required, he will find that there has already been substantial improvement. However, there is still scope for more and I have no doubt that the emphasis that the Benefits Agency already puts on service to the public will contribute to the further improvement that my hon. Friend and I both want.

Mr. Lester: It is very interesting that, following the Moodie report, my right hon. Friend has moved to the policy of having a Benefits Agency. I welcome his non-complacent attitude and awareness that matters can always continue to improve. Is he satisfied that the interface between the Benefits Agency and the Department of Employment, particularly when dealing with people who move from Department of Employment benefit to income support, is first class, because nobody wants to make it more difficult for people who are currently unemployed or are becoming long-term unemployed?

Mr. Newton: I should not wish to appear complacent about that aspect of the social security system, any more than any other. I am sure that there is scope in that area for further improvement. I am confident that the combination of the Employment Service Agency and the Benefits Agency will produce further improvement.

Mr. Grocott: Cannot the Secretary of State understand the considerable scepticism that exists about any of his planned changes since one consequence of the changes is the diminution of his accountability to the House and the accountability of him and his Ministers to individual Members of Parliament? Is not it the habit of Ministers that when they have anything good to say, they much prefer to say it to the House? Therefore, it occurs to many of us that the reason why the Secretary of State puts himself behind the front line is that he is not too proud of the changes.

Mr. Newton: The hon. Gentleman is unduly cynical, even by the standards of the House. The accountability, to the House and to Parliament as a whole, of the Secretary of State for Social Security for the social security system is entirely unchanged. In my view, it will be more effective, because it will operate on the basis of clearly set targets and the delegation of responsibility, in terms that make it much easier to judge whether those targets are being met.

Mr. Meacher: As good service is about providing adequate benefits and not less benefit more quickly, is not the Secretary of State ashamed of the EC report of a week ago which finds that while the number of poor people elsewhere in the EC remained broadly stable through the 1980s, in Britain the number of poor households has increased by a third? When will he apologise to the House for the Government having caused that by breaking the pensioner link with earnings, by failing repeatedly to uprate child benefit, by forcing families into poverty as a result of the social fund, by huge cuts in housing benefit and by making the poorest of all pay the poll tax? Is not all the razzamatazz about agency status merely a cover-up for the greatest increase in poverty and inequality since the war?

Mr. Newton: Obviously the hon. Gentleman has not studied with great care the statistics to which he refers. He well knows that average incomes were used as the benchmark for them, which means that at a time when average incomes have been rising quickly there is an apparent increase in the number of those in poverty measured on that basis. If the hon. Gentleman thinks that it is sensible to rest an analysis of that sort on the basis of figures that appear to produce an increase in poverty when average incomes rise quickly, he should do more homework.

Mr. Meacher: It is an EC report.

Mr. Newton: Of course it is an EC report, but that does not necessarily make it sensible. I am sure that the information is good, but the analysis is wrong, as is the use which the hon. Gentleman made of it.
I take up the point which my right hon. Friend the Minister for Social Security and Disabled People made in another context last week, which revealed again the absurdity of the way in which the figures are used. It happens that 50 per cent. of average incomes was used as the benchmark. Taking Europe as a whole, that produced the result that 50 million people were poor. Had 40 per cent. been used as the benchmark—there was no specially good reason for taking 50 rather than 40 per cent.—the result would have been halved to 26 million. The figures are worth only as much as the interpretation placed on them and the interpretation is ridiculous.
One last point—[Interruption.]

Mr. Speaker: Order. It would be helpful if the Secretary of State answered the supplementary questions, not questions that have not been asked.

Mr. Newton: rose——

Mr. Speaker: Very briefly.

Mr. Newton: The hon. Member for Oldham, West (Mr. Meacher) asked about half a dozen questions. As he put


forward a proposal to increase child benefit that would have done nothing for the poorest families in the country, I wonder how he has the nerve to raise these matters.

Computerisation

Mr. Simon Coombs: To ask the Secretary of State for Social Security if he will make a statement on the level of savings in costs and time brought about by computerisation within his Department.

Miss Widdecombe: The Department's operational strategy—the biggest and most ambitious computerisation programme in Europe—is proceeding as planned and should be fully implemented in July. Most local offices have already gone live and are providing a quicker, more accurate service. For example, the processing time for income support claims has reduced from 6·2 days to five days and for retirement pensions from 28·5 days to 20·3 days.

Mr. Coombs: Will my hon. Friend tell my constituents how they have benefited from the computerisation process by telling the House the degree to which the accuracy of income support claims has been improved since computerisation took place?

Miss Widdecombe: Swindon is already benefiting from the pension system, which is on line. It will shortly be benefiting also from the income support system. After those systems have been in place for some time, my hon. Friend will notice, as has been noticed in other constituencies, that there is a marked increase in speed and accuracy in responding to claims. My hon. Friend will be aware of the business plan recently published by the Benefits Agency and of the most impressive target for accuracy and speed contained therein.

Mrs. Fyfe: How can the Minister say that when we all have constituents who have waited weeks and even months after claiming benefits, only to receive them in the few weeks before the financial year ended, when officers were reconsidering their budgets? Would it not be more sensible to put the money into people's hands when they need it, not weeks and months later?

Miss Widdecombe: The hon. Lady is describing a system that most of those who are already computerised and have been for some time would not recognise. Among the local offices that I have visited have been those which are now turning round pension claims in days rather than, as previously, in weeks. It is true, in the immediate aftermath of new systems being introduced, there is sometimes some backlog and delay. When that has been cleared, the uniform experience thereafter is greater speed in delivery of benefits.

Child Support Agency

Mr. Butler: To ask the Secretary of State for Social Security what progress he has made in setting up the Child Support Agency.

Mr. Jack: I am glad to report to the House that the key objectives of site selection for the agency's centres are developing well. The appropriate information technology systems are being evaluated and job design for them is also

progressing well. We are confident that the agency will be able to meet its operational requirements by early 1993, as set out in the White Paper "Children Come First".

Mr. Butler: Will my hon. Friend outline some of the local employment created as a result of this welcome measure? Will any local employment be created in Warrington?

Mr. Jack: I congratulate my hon. Friend on the assiduousness and persuasiveness with which he wrote on behalf of his constituents to those given the responsibility for site selection. We hope to establish up to six regional centres for the Child Support Agency. I assure my hon. Friend that, although at this stage I cannot reveal precisely the locations of the centres, we have taken carefully into account the facts that he put before the House.
Each of the regional centres will employ up to 500 people. In total, about 5,000 people will be employed by the Child Support Agency—an increase of some 3,500 overall in the number presently involved in liable relative work in the Department.

Mr. Meacher: Now that a vote in another place means that the Secretary of State will not be given the proposed punitive power to remove the right to income support from a lone parent who declines, often for good reason, to name the father, will the Minister give a commitment that the Government will use the carrot and not the stick? Will they encourage lone parents to name the father by allowing them to keep a proportion of the maintenance thus obtained? Will the Minister at least give a commitment that he will not reintroduce any punitive measure that forces unemployed fathers below the level of subsistence?

Mr. Jack: I am glad that the hon. Gentleman has asked me that particular question. I draw to his attention the fact that clause 5 of the Child Support Bill remains in place as a result of the discussions in another place. As he will know, that clause contains a requirement that the information be made available to child support offices during their inquiries relating to seeking maintenance. We listened carefully to the arguments on clause 22, which deals with this matter. That consideration continues. Until that operation is concluded, I cannot give the hon. Gentleman a precise answer to his question.

Disabled People (Allowances)

Mr. Lawrence: To ask the Secretary of State for Social Security how many disabled people will benefit from the introduction of (a) the disability living allowance and (b) the disability working allowance.

Mr. Scott: We estimate that nearly 300,000 people will benefit from the introduction of disability living allowance and about 50,000 will be receiving disability working allowance at any one time.

Mr. Lawrence: Are not these considerable, substantial and constructive improvements in the conditions of disabled people in Britain? Is not there a world of difference between Labour promises, which are not even priority pledges and which socialist management of the economy could never deliver any more than it did the last time that the Labour party was in power, and actual Conservative deeds?

Mr. Scott: I am delighted that my hon. and learned Friend recognises both the progress that we seek to make and the failure of the Opposition. There was previously a partial incapacity benefit. For the first time, we are introducing a benefit that will encourage those who are able and want to work, to do so. That is a great step in the right direction. I am also pleased that, in the vast majority of cases, we have moved away from medical assessment to self-assessment, as that is a better way to handle these matters.

Ms. Mowlam: Will the Minister express his disgust at the fact that one group of disabled—haemophiliacs suffering from AIDS—has not yet received a penny from the Government? Will he assure the House now that anyone who applies to the Macfarlane Trust and eventually, through the rhetoric, gets some money, will not be denied any social security benefits such as disability working allowance?

Mr. Scott: The hon. Lady is wrong to suggest that haemophiliacs have not received any money from the Government. They have received a great deal of money. There was a lot of misleading comment in the press this weekend and I should like not only to lay that ghost but to refute the suggestion that payments from the haemophiliac trust, the Macfarlane Trust, are not being disregarded for social security benefits. They are and they will continue to be so.

Child Support Agency

Mrs. Gorman: To ask the Secretary of State for Social Security how the Child Support Agency will assist lone parents.

Mr. Newton: The Child Support Agency will be a purpose-built organisation with a single aim of providing an efficient and effective service for all families for whom child maintenance is an issue. The use of an administrative formula to calculate child maintenance will produce consistent and predictable results, introduce the opportun-ity for regular review and reduce the scope for dispute.

Mrs. Gorman: I thank my right hon. Friend for his reply. I entirely support the Government's intention to ensure that three quarters of absent parents who presently do not support their children should be made to do so. Has he thought about the fact that what mothers in such cases need is the money in their hands? Having been made an award, they will not necessarily get that money unless the father can be tracked down and made to pay. The award that the Government will have made is a negotiable document for the mother. In the private sector, one could factor such an award—go to a bank or some other organisation and be able to get the money up front. When we discuss the Bill in the House, will my right hon. Friend consider introducing that idea into it?

Mr. Newton: I note my hon. Friend's suggestion. The main point that I would make in reply is that one of the groups for whom the use of the agency will be compulsory is lone parents on income support. In those cases, it is difficult to see quite what they would gain from my hon. Friend's proposal, because if maintenance does not come, income support does. The state is providing a guaranteed income.

Dr. Godman: Will lone parents in receipt of income support, especially mothers bringing up children on their own, receive any assistance by way of advice and representation when they apply for community care grants or crisis loans from their local DSS offices? Are not women in such circumstances often in need of professional advice, especially when challenging decisions taken by adjudica-tion officers?

Mr. Newton: Perhaps for good and understandable reasons, the hon. Gentleman is taking us rather wide of the subject of the Child Support Agency. I would certainly hope that, in line with much that has happened in recent years, and referring back to the question about the Benefits Agency, there will be a continuing improvement in the advice and assistance that the Department, along with many other organsiations, is able to offer claimants.

Child Benefit

Mr. Knox: To ask the Secretary of State for Social Security how many letters he has received about the uprating of child benefit in recent years.

Mr. Newton: There were 374 letters to Ministers in 1989 and 164 in 1990.

Mr. Knox: Is my right hon. Friend aware how warmly the decision to resume the index-rating of child benefit has been received? Will he accept my congratulations on winning that battle with the Treasury?

Mr. Newton: That is probably as friendly an exchange as I have had with my hon. Friend in the better part of eight or nine years, mostly as Minister responsible for social security. Perhaps I should congratulate him on being so nice to me.

Mrs. Margaret Ewing: Will the Secretary of State be responding to a report, which came out today from the Family Policy Studies Centre, showing that larger families in the United Kingdom benefit least from Government assistance in rearing their children? It would be helpful if he could place the report in the Library.

Mr. Newton: I shall consider whether to place it in the Library when I have established more about the precise status of the report. It is worth noticing that the only country in Europe where the average family size is not less than two is Eire, so comparisons that rest heavily upon child benefit for larger families apply only to a small minority. What we hear less about is that, for example, if the French regime for child benefit, in which there is no payment for the first child, were in force, 40 per cent. of those who receive child benefit in this country would not get it.

Mr. Favell: As my right hon. Friend knows, the increase in child benefit will be a help to the poorest families. However, one thing concerns me. The number of illegitimate births to women who have never been married seems to be rising. In Manchester last year, 49 per cent. of all births were illegitimate. Have the Government any plans to educate young women at school about the difficulties that they will face? I do not think that people appreciate the problems of bringing up a child alone.

Mr. Newton: It is probably best for me to draw my hon. Friend's remarks to the attention of my right hon. and


learned Friend the Secretary of State for Education and Science; I have not yet gone into the workings of the education system. Let me pick up one point, however. My hon. Friend said that the increase in child benefit would help the poorest families. That is true of our child benefit increase, but not of the increase proposed in the shadow Budget by the hon. Member for Oldham, West (Mr. Meacher).

Clients (Facilities)

Mr. Tony Banks: To ask the Secretary of State for Social Security how much has been spent in London social security offices on facilities for clients during the latest period for which figures are available.

Miss Widdecombe: In the financial year 1989–90, £1·5 million was spent on capital refurbishment projects at 13 offices in the London area. Expenditure in 1990–91 is estimated at £5 million at a further 31 offices. A breakdown of expenditure between customer and staff areas is not available from information held centrally.

Mr. Banks: But a breakdown is precisely what I wanted. I am not arguing about the amount of capital expenditure on London offices; I want to know what is being done to stop supplementary benefit claimants being treated so shabbily in those offices.
Is the Minister aware that the new office at Stratford was clearly designed for no clients to come in at all? Nothing much has been provided in the way of chairs, and it is impossible for those going there, who may have to wait for hours, to obtain a hot drink. When will the Minister start arranging for such people to be treated like decent human beings rather than like dirt?

Miss Widdecombe: As he visited the Wood Grange Park office in February, the hon. Gentleman will be aware of the unfortunate circumstances that prevail. He will also know that one of the problems has been an increase in the number of Somali refugees who are applying for benefit. I share his concern that conditions in the offices should be adequate: that is why we have spent some £40 million on improving offices throughout Great Britain. Every effort is being made to resolve the problems in the hon. Gentleman's constituency.

Oral Answers to Questions — THE ARTS

Arts Venues

Mr. Bowis: To ask the Minister for the Arts what visits he has made to arts venues in London outside the west end and other nationally funded centres.

The Minister for the Arts (Mr. Tim Renton): I regularly visit arts venues throughout the country, including the Battersea arts centre, in my hon. Friend's constituency. With permission, I shall arrange for a list of those that I have visited so far this year to be published in the Official Report.

Mr. Bowis: Does my right hon. Friend agree that, when it comes to the arts, there are really two Londons? There is the London of the centres of international and national excellence in and around the west end and the world of the Londoner's arts. As my right hon. Friend rightly pointed out, this includes, among many other excellent venues, the

Battersea arts centre. Those centres depend for their funding partly on the borough, partly on the Arts Council and partly on the London borough grant scheme.
Has my right hon. Friend seen the reports in this week's Stage and Television Today, which quotes, among others, the National Campaign for the Arts stating:
Vote Labour And Arts Will Suffer"?
That is because Labour councillors involved in the London borough grant scheme and in the boroughs have withdrawn their support for the arts in London. Will my right hon. Friend do everything possible to restore that support, and perhaps consider whether the grant scheme is the best way forward?

Mr. Renton: I agree that London is a vibrant centre for the arts outside the west end. Some 160 clients in London receive revenue support from the regional arts association, and many of them are not west-end based.
I also agree with my hon. Friend's analysis of the diverse funding for the arts in London. It is extraordinary that the shadow Arts Minister is not with us today, given that virulent criticism in the Stage—
Vote Labour And Arts Will Suffer".
The paper is not normally a supporter of the Conservative party. I can only suppose that, after all those months of preaching Labour support for the arts, the shadow Arts Minister has taken fright today—that he has not dared to face the music, and has gone off to read "The Wreck of the Hesperus" by himself.

Dr. Marek: The Minister is very unfair. The shadow Minister for the Arts has been held up. A note of apology will no doubt come to the Minister in due course. He wanted to be here, but he could not get here in time. I hope the Minister will accept that explanation.

Mr. Renton: I thank the hon. Gentleman for saying that. No apology had reached me. If something like that which appeared last week in the Stage had been written about me, I do not know whether I should have turned up today.

Miss Emma Nicholson: When the Minister visits arts venues, either inside or outside London, will he please press, especially on venue managers, the needs of the disabled? Does he know that the only dignified night out that a disabled person can have at an arts venue is to sit at home in front of the television set?

Mr. Renton: I agree with my hon. Friend. I thank her and congratulate her on all the work that she has done by means of the ADAPT programme to help to improve access for the disabled and the deaf to arts venues. Arts companies throughout the country are becoming more and more aware of the issue. When I recently visited the new West Yorkshire playhouse in Leeds I was delighted to see how far it had gone towards making access to both theatres available to the disabled. That trend ought to be continued.
Following is the information:

Arts venues visited by the Minister for the Arts since January 1991 (outside the west end)


Date



6 January
Sadler's Wells Theatre


14 January
Tate Gallery


17 January
Science Museum


23 January
Queen Elizabeth Hall


24 January
Barbican

Arts (London)

Mr. Tony Banks: To ask the Minister for the Arts if he will earmark additional revenues for funding the arts in London.

Mr. Renton: No, Sir, as London is already well funded by the Arts Council. Even omitting the national companies, London is the best funded region at £2·75 per head of population.

Mr. Banks: The Minister is being remarkably complacent. in view of the question he was asked by the hon. Member for Battersea (Mr. Bowis). Is he aware of the chaotic situation that the London borough grant scheme is in? That scheme was set up to fund voluntary bodies after the destruction of the Greater London council by the Conservative Government, but it has been hindered by Conservative councillors who are looking for cuts. If that happens, arts in all the London boroughs will be decimated. What is the Minister doing about the London borough grant scheme? What consultations has he had with the Department of the Environment, where the responsibility rests? If he does not do something, he will have an appalling mess on his hands. Is he prepared to wash his hands, just like Pontius Pilate?

Mr. Renton: The hon. Gentleman's analysis is wrong. There is a Labour-Liberal majority on the London borough grant scheme. Labour councillors are pushing their arts company clients off the edge of the table, one after the other, in order to spend the money available on projects that they think have more popular political support. That was at the heart of the criticism last week in the Stage. That is why so many people in London are totally losing faith with Labour councillors. The shadow Minister for the Arts has preached, but he cannot deliver Labour councillors.

Mr. Jessell: As London is highly successful as the arts capital of the world, as millions of people come here to see our arts and heritage, as their spending generates a huge amount of income and employment, and, therefore, tax returns to the Government, and as a strong centre helps the edges, ought not we to continue to build on our strength?

Mr. Renton: I fully agree with my hon. Friend. As he is a well-noted pianist, I hope that he will continue to give recitals throughout the summer which will encourage the arts in, and attract attention to his constituency. London is a very successful centre for the arts. It is only right that successes should be remembered. For example, the reopening of the Royal Shakespeare Company at the Barbican three weeks ago was very much due to the enhancement fund recently set up by my right hon. and learned Friend the Chief Secretary.

London City Ballet

Mr. Simon Hughes: To ask the Minister for the Arts what proposals he has for ensuring the future of the London City Ballet.

Mr. Renton: I very much hope that a solution can be found to the company's financial difficulties. The Arts Council makes decisions relating to the funding of individual arts bodies. I understand that recent discussions between the council and the company have been constructive and moderately encouraging.

Mr. Hughes: I am grateful to the Minister for what may give some hope to London City Ballet. Does he accept that over 13 years the ballet company has built up a reputation as one of the leading classical ballet companies in the country, that it tours to about 26 venues, that attendances are over 80 per cent., that it has a leading educational programme and that its closure and disappearance this summer would be a grave blow not just to London but to ballet and the arts countrywide? Will he personally take an interest in the matter so as to ensure that London City Ballet survives and is funded properly?

Mr. Renton: I saw the chairman of London City Ballet last week and had a long discussion with him. I agree with many of the comments that the hon. Member for Southwark and Bermondsey (Mr. Hughes) has made about the artistic work of the company. I saw its "Cinderella" production at Sadler's Wells just before Christmas, and it was very good indeed, However, the hon. Gentleman, as a fair man, knows the difficulties. He knows that the Arts Council's budget for dance, including ballet, is fully committed. It is a strange notion that the support of a group of successful business men who, by their own endeavours, have funded the London City Ballet for the past 13 years, while the company was being built up, should automatically be replaced by Government support. It is rather difficult to accept that the Government should automatically pick up the bill when that group, for its own reasons, decides to withdraw funding. London City Ballet received a touring grant of £100,000 last year. This year, in view of the slightly smaller number of touring weeks, the grant will be £89,000.

Mr. Tracey: Will my right hon. Friend look seriously at some of the points that have been made about the London borough grant scheme? There is no doubt that among


London Members of Parliament there is serious bias over the provision of grants for honourable causes. I want aid to be provided for particularly honourable causes in our boroughs.

Mr. Renton: The decision as to who is aided under the London borough grant scheme is one for the scheme's board, on which there is a Labour-Liberal majority. I asked my right hon. Friend the Secretary of State for the Environment to do everything possible to ensure that the LBG's budget allocation this year is decided quickly and that it is as large as possible. Within those parameters, the Secretary of State for the Environment recommended total grants of more than £30 million. At present, councillors are talking about a somewhat lower level. That is what lies at the heart of the difficulties concerning arts clients. I repeat that it is Labour councillors who, one after another, are jettisoning their arts clients.

Oral Answers to Questions — CIVIL SERVICE

Women Civil Servants

Mrs. Currie: To ask the Minister for the Civil Service how many women are now in post in the civil service at under-secretary level and above; and how many there were 10 years ago?

The Minister of State, Privy Council Office (Mr. Tim Renton): There are now 45 women in the civil service at under-secretary level and above; 10 years ago there were 31. A programme of action to achieve equality of opportunity for women in the civil service has been in place since 1984.

Mr. Tony Banks: If I were the hon. Lady, I should put in an application.

Mr. Speaker: Order.

Mrs. Currie: I thank my right hon. Friend for his reply and congratulate him on the 50 per cent. increase in the number of women at the higher levels of the civil service. I do not want to carp, but does my right hon. Friend agree that, in a world in which more than 50 per cent. of the electorate are women, arid in which nearly half of the work force are women, it is time to increase the number of capable women who reach the higher levels of the civil service to something approaching the proportions that they achieve at the lower levels?

Mr. Renton: I agree with my hon. Friend. One of my overall responsibilities as a civil service Minister is to see that the aim that has been voiced by my hon. Friend is realised. I hope that it will be some comfort to her to hear that the proportion of women younger than 45 in the top three grades is higher than the proportion of men in that age group, and that there is a higher proportion of women in grades 5 to 7. The latter figure is up considerably on that of six years ago. That gives me reason to believe that in the years immediately ahead there will be a higher proportion of women in absolutely top positions.

Dr. Marek: Does the Minister realise that there is no shortage of talent among women in Britain and that simply saying that he is led to believe that things might get better is not good enough? Can I invite him to set a target to make sure that at least 40 per cent. of all civil service posts, especially those between grades 5 and 7 and grades

4 and above, will be filled by women within five years? If the Minister sets himself that target, he will earn the congratulations of the whole House.

Mr. Renton: I have only to look at the Benches around and behind me to realise that there is no shortage of talent among women in Britain. Setting a target would not be a realistic approach. It would be far better to make sure that the top posts go to those with the greatest ability, no matter what sex or ethnic origin. My office is certainly dedicated to that aim and we shall do our utmost to achieve it.

Sir Dudley Smith: While there is no room for complacency on matters of equality, will my right hon. Friend confirm that our record throughout public service and industry bears up very well in comparison with other countries in the European Community?

Mr. Renton: I thank my hon. Friend for making that important point. Although the percentage of women in the civil service is still low—indeed, too low—it is increasing pretty rapidly.

The Gulf

Mr. Dalyell: To ask the Minister for the Civil Service what advice has been given by the occupational health service to civil servants required to visit the Gulf region in the course of their official duties.

Mr. Renton: No general advice has been issued. The occupational health service gives advice accompanied by appropriate briefing and leaflets to all civil servants travelling abroad as and when required.

Mr. Dalyell: Would it be unduly alarmist to suggest that civil servants, service men and the local population, who are subject to hydrogen sulphide and mixtures of chlorine and hydrocarbons, risk cancer or leukaemia? In those circumstances, will the Minister undertake to look at the statements of Professor Nicholas Wright of the Imperial Cancer Research Fund, which suggest that no research is being done along those lines? Should not the Government find out the effects of unprecedented oil fires on human health?

Mr. Renton: I know of no specific evidence that the hon. Gentleman could adduce to back up the remarks that he has just made. However, the booklet, "Keeping healthy overseas", which is issued by the civil service occupational health service to all civil servants travelling abroad, gives some specific advice. When I was working in the private sector and travelled abroad a great deal for my employers, I was never issued with any such booklet.

Drug and Alcohol Misuse

Mr. Rathbone: To ask the Minister for the Civil Service what arrangements are made for counselling drug and alcohol misusers in the civil service.

Mr. Renton: We advise managers in Departments and agencies to encourage staff with an alcohol or drug abuse problem to seek appropriate counselling or treatment. This may involve giving them the opportunity of talking to a welfare officer or occupational health service staff. They can then be advised on how to seek help for their specific needs.

Mr. Rathbone: I welcome the concern for those personal problems and urge on my right hon. Friend the need to establish points of contact outside the civil service for people who may have those problems because of the reticence that many feel in seeking help within the civil service.

Mr. Renton: I accept my hon. Friend's wise suggestions and I shall pass them forward to the civil servants in my office. I should point out that in January 1988 we issued a policy guidance note which was followed up by a pamphlet called "Misuse of drugs: training framework" for personnel managers. We have tried to give personnel managers sensible advice. I shall certainly ensure that my hon. Friend's points are considered.

Dr. Godman: If counselling has replaced the issuing of disciplinary orders against such civil servants, when

someone undertakes that counselling or the treatment recommended by the counsellors, is that fact wiped off his or her personal record?

Mr. Renton: The hon. Gentleman will realise that it is not possible to be specific in advance as to whether the action taken in individual cases should be only counselling or could also involve something much more serious. If it was a case of the possession of, or trading in, illicit drugs on a Department's premises, I am sure that the hon. Gentleman would agree that counselling would not be sufficient and counsellors would have to take a more serious view of such illegal action.

Mr. Simon Hughes: On a point of order, Mr. Speaker.

Mr. Speaker: I will take it after questions on the statement.

Mr. Hughes: The Minister will have gone by then.

Iraq

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): With permission, Mr. Speaker, I wish to make a statement about the relief of suffering in Iraq. We are faced with suffering and fear on a huge scale—inside Iraq, on both sides of the border with Turkey, on both sides of the border with Iran, and in the demilitarised zone bordering Kuwait. Each of these areas has its difficult problems and in all of them the needs are formidable.
Our response has two elements: first, to keep the refugees alive; and, second, to create conditions in which they can return home in safety.
We have given prompt humanitarian help. We airlifted relief supplies to the Turkish and to the Iranian Red Crescent Societies. With the United States and France, Royal Air Force aircraft have been airdropping supplies into northern Iraq. With the Americans and Germans we are now engaged in a helicopter airbridge. My right hon. Friend the Secretary of State for Defence has arranged for six more Chinook helicopters to deploy to Turkey from the middle of this week, bringing to nine the British helicopters joining in this effort. We are contributing over £20 million to appeals by the United Nations and other international agencies. This includes the International Committee of the Red Cross, which is at present providing the most effective help inside Iraq. Part of this money will go to our own non-governmental organisations whom I met this morning.
We helped bring about Security Council resolution 688 which requires Iraq to co-operate with the United Nations and other international humanitarian organisations and to stop repression. The Iraqis are receiving UN missions led by the Secretary-General's representative, Mr. Suy, and by the UN co-ordinator, Prince Sadruddin.
At the special European Council at Luxembourg on 8 April, my right hon. Friend the Prime Minister put forward a four-point plan to build on the resolutions of the Security Council. First, he proposed the establishment of temporary safe havens in Iraq, in which UN officials can provide for the basic needs of refugees and monitor their security until they can return to their homes in safety. Secondly, he proposed a generous contribution by the European Community to the UN and other appeals for funds for humanitarian relief. The Community immediately contributed 150 million ecu.
Thirdly, apart from food and humanitarian supplies, he proposed that economic and financial sanctions against Iraq should remain in force until Saddam Hussein's offer of an amnesty is made permanent and the international community is satisfied that persecution of minorities in Iraq had ceased. Fourthly, he proposed a strict arms embargo against Iraq to remain in force as long as Saddam Hussein is in power.
We are vigorously pursuing this proposal for safe havens. Our aim is to create places and conditions in which the refugees can feel secure. We are not talking of a territorial enclave, a separate Kurdistan or a permanent UN presence. We support the territorial integrity of Iraq.
But we have to get the refugees off the mountains. That is the unanimous view of those who have visited the area on behalf of the ODA and the British NGOs with whom I talked this morning. Some refugees are now being

admitted to places in Turkey and Iran where they can be better cared for. That is welcome, but it is not the right answer except temporarily. We should not aim to add a new permanent refugee problem to the others that already disfigure the world.
The Kurds should be enabled and encouraged to return to their homes, where effective help can be given, but they will not do that unless they feel secure. Undertakings such as those made yesterday by the Iraqi Government will not suffice for that purpose. The United Nations presence in Iraq must build up fast and solidly to monitor and to ensure the safety of those whom the Security Council has resolved to help. We share the view of President Bush when he said yesterday:
We will not tolerate any interference in this massive international relief effort".
To help to carry the British relief effort forward, my right hon. Friend the Minister for Overseas Development will visit Turkey and Iran, including the frontier areas, later this week.

Mr. Gerald Kaufman: The Opposition share the horror of the whole country—and indeed of all the civilised world—at the repression carried out by Saddam Hussein against the Kurds, the Shi'ites and many other inhabitants of Iraq. We strongly support Security Council resolution 688, which calls on the Iraqi regime to end the repression and which demands access by international humanitarian organisations to alleviate the suffering. We welcome the assistance already provided, but we believe that it should be increased substantially by the United Kingdom, as well as by the European Community and other agencies, not only for the Kurds themselves, but for Turkey and Iran which are faced with such a problem in seeking to take in Kurdish refugees.
We think that it is right that proper protection should be given to the teams going into Iraq to provide that help, but we do not believe that that should be the limit of our action. We stand by our view that the war aims against Iraq should not have extended, and should still not extend, to attempts to dismember that country or to change its regime, however vile that regime may be. The question of who governs Iraq must be decided by the Iraqi people.
At the same time, resolution 688 authorises the United Nations Secretary-General to send a mission to Iraq to report on the plight of the civilian population and in particular on the plight of the Kurds. I ask the Foreign Secretary to instruct our Permanent Representative at the Security Council to propose at the Security Council that the Secretary-General sends a mission to investigate charges of genocide, with the intention of the earliest possible report, bearing in mind that the United Nations genocide convention authorises punishment of those who transgress its provisions. Although we do not believe that any one country or combination of countries should send troops into Iraq for whatever purposes other than for the protection of relief missions, we believe that if genocide charges are proved the military staff committee of the Security Council should consider, as a matter of urgency, what appropriate action might be taken by the international community to seek to bring such acts to an end and to deal with those responsible.
The right hon. Gentleman said nothing about the wider middle east crisis. Will he give his full support to the efforts of the United States Secretary of State, Mr. James Baker, to convene an international conference? Does the right


hon. Gentleman agree that what is going on in Iraq now, horrifying though it is, is no more than the latest dismaying symptom of an endemic crisis in the area which must be solved? Unless there is a settlement which brings security to all nations in the region, including Israel, and which provides self-determination for the Palestinian people, what we are witnessing now will be seen not only as the bloody aftermath of one war but as the prelude to another war which will be bloodier still.

Mr. Hurd: On the right hon. Gentleman's first point, I confirm that we intend steadily to build up and increase the British relief effort and to apply pressure continuously day by day, as we have done for a long time, on the United Nations and on other agencies to do the same.
Secondly, the right hon. Gentleman correctly said that genocide is a crime under international law—the convention of 1948—and that the contracting parties have agreed to prevent and punish that crime. People charged with genocide can be tried before national courts. Proof is required of the intention to destroy in whole or in part one of the groups defined in the convention by carrying out certain acts.
The Secretary-General has, in a way, anticipated the right hon. Gentleman's point, because, as he said, he has sent Mr. Suy, his representative on human rights, to Baghdad. It will be sensible for the Security Council to consider very carefully what Mr. Suy may have to report, which will bear on the question of genocide.
I agree with the right hon. Gentleman's third point. I discussed the problem on the telephone with Mr. Baker on Saturday. He knows that his efforts, which are energetic and well conceived, will continue to receive our support.

Mr. David Howell: Does my right hon. Friend accept that the initiatives taken by our right hon. Friend the Prime Minister and by himself to help the Kurds and Shias stand out as highly creative acts of statesmanship in a very negative international climate? Does he further accept that there will be no feeling of safety for the Kurds or Shias, who have been the subject of the most appalling atrocities, no guarantee for us or the United Nations that any resolutions will be fully implemented and satisfied and no peace or security in the region, even for the Kuwaitis and neighbouring countries, until in Baghdad there are the glimmerings of a Government who have a minimal respect for human rights and do not believe that blood and killing are the main weapons of governing a country?

Mr. Hurd: I agree with my right hon. Friend. I cannot conceive of the present regime in Iraq, which has shown itself to be aggressive abroad and barbarously oppressive at home, finding its place again as an important middle eastern state in the international community.
The initiative of my right hon. Friend the Prime Minister has moved the international effort forward, both as regards the United Nations and some of our most important allies. Needs are multiplying all the time, so we cannot be complacent about our response so far, but the British initiative has moved the response forward.

Mr. Menzies Campbell: The Foreign Secretary will be aware that logistical supply and air supremacy were important factors in the allied victory in

the Gulf war. Will he confirm that the same standard of expertise of supply will be used for humanitarian purposes? Will he further confirm that the allies are willing to use air supremacy to protect Kurdish refugees?

Mr. Hurd: The first point made by the hon. and learned Gentleman is entirely right. The international relief effort, in complicated and difficult conditions, is using the full expertise and experience which we all have and which, increasingly, is being pooled. The effort was originally focused heavily on the Turkish side, but the greater problem, as the hon. Member for Cynon Valley (Mrs. Clwyd) will confirm, is on the Iranian side. We shall increasingly find our effort and those of some of our allies and the United Nations agencies such as the United Nations High Commissioner for Refugees, who is in Iran at the moment, being devoted to that aspect.
The United States has given clear warnings to the Iraqi Government, the importance of which was stressed to me by Mr. Baker on Saturday. The fundamental point is that a huge international life-saving operation is under way and the Security Council has insisted that Iraq co-operates with that effort. If the relief effort is harassed or frustrated by Iraq, it will be the responsibility of the United Nations to protect both the helpers and the helped, and the Security Council would have to act on that responsibility.

Mr. Julian Amery: Does my right hon. Friend agree that there is overwhelming support in this country and in Europe and growing support in the United States for the concept of my right hon. Friend the Prime Minister of safe havens for the Kurds and, I hope, for the Shias, too? Does he further agree that if there should be a conflict between our commitment to non-interference in the affairs of other countries and our determination to help refugees in danger of persecution, whether in Kurdistan or south Iraq, we shall come down firmly on the side of the refugees, even if that means co-operating with some of our allies in the use of military power—I hope, under the aegis of the United Nations and, if not, otherwise?

Mr. Hurd: It is important to continue, as we have begun, with the authority of the United Nations. Security Council resolutions 687 and 688, in both of which we had a substantial hand, extend the boundaries of international action and thus strike the balance, about which my right hon. Friend is talking, in a rather different place from hitherto. I chose my words carefully in answer to the hon. and learned Member for Fife, North-East (Mr. Campbell) to show that we believe that that process should, if necessary, continue.

Mr. D. N. Campbell-Savours: For the people of Kurdistan, genocide is proven. Resolution 688 has been breached—there can be no doubt about that—in so far as Saddam Hussein continues to repress the people of Kurdistan. The Kurdish leaders desperately beg for military action by the major powers, preferably through the United Nations, through the use of aircraft against the equipment used for the repression of the Kurds. Why, when on 28 March we raised in the Chamber the imminent catastrophe in the region, was there such a delay in providing aid? Is it not true that the Kurds have had to wait for nearly two weeks for the first British aid to reach


them? If that is not true, will the Foreign Secretary give us the date when the first aid was received by people in Kurdistan?

Mr. Hurd: Long before the Kurdish rebellion the United Nations put it to the world that it thought that in the aftermath of the Gulf war there was likely to be a strong movement of refugees out of Iraq. That was foreseen. We provided a further £8 million, including £1 million to the United Nations disaster relief organisation, precisely for that purpose, not knowing then exactly when or where the movement would be or the numbers involved. It was a case of an international organisation foreseeing trouble, asking for help and getting help from us. That was long before the debate. The planning to deal with the immediate crisis began before the Easter weekend and has built up ever since. I was in touch with those concerned over the Easter weekend. The hon. Gentleman asked for a particular date, and I shall provide him with it.

Mr. Roger Gale: The decisive action taken by my right hon. Friend the Prime Minister during the recess to send aid to Kurdish refugees as a damage control exercise and his further proposal to establish safe havens have been most welcome, but is it not a fact that there will be no safe haven for the Kurdish people or the minority peoples of Iraq so long as Saddam Hussein is in power? Will the Government send a message both to President Bush and to the Secretary-General of the United Nations to the effect that we expect whatever action, including military force, is necessary to secure safe havens and to remove Saddam Hussein?

Mr. Hurd: Those are two distinct questions and I have already answered the first. If the United Nations, under the terms used in the Security Council resolution 688, is insisting on Iraqi co-operation in the humanitarian effort —about the need for which there can be no possible doubt —the need to protect that operation for the benefit of the helpers and the helped, should it be frustrated or harassed, is clear.
No one who followed not just what President Bush said but what my right hon. Friend the Member for Finchley (Mrs. Thatcher) or the present Prime Minister said could have been led to believe at any stage that it was part of our purpose to change the Government of Iraq.

Mr. Peter Shore: Is not the cause of this vast tragedy quite clear? Is it not entirely due to the wicked and continuous persecution of his own people by Saddam Hussein? Is it not the case that we already have the authority of the Security Council in its resolution 688 to take action to stop Saddam Hussein from persecuting his own people? That authority is in the text of the resolution and it calls upon him to cease immediately the persecution of the people of Iraq. Does not that resolution come under the mandatory chapter 7 of the Security Council? Is there not a moral obligation on Britain and other nations to undertake such actions as are necessary to stop Saddam Hussein's persecution of his own people?

Mr. Hurd: That is precisely what we are doing within the terms of that resolution. We are bringing into effect a humanitarian effort in circumstances which I think are unprecedented in the history of the United Nations. That is happening under terms and phrases of insistence which are, I suspect, although I have not done all the research,

unique. That effort needs to proceed and if it does so without harassment or interference by the Iraqis, over time the Kurds—although not just the Kurds because the Opposition are right in believing that it goes further than them—will have the confidence to return to their homes. If that effort is harassed and frustrated, those Kurds will not return and the Security Council has a responsibility, which we have fully emphasised for some time, under resolution 688 to ensure that that effort succeeds.

Sir Peter Blaker: I add my congratulations to my right hon. Friend the Prime Minister to those already given by my right hon. Friend and hon. Friends on his initiatives. The House will welcome what my right hon. Friend the Foreign Secretary just said in response to the hon. and learned Member for Fife, North-East (Mr. Campbell) on the availability of air cover. Does my right hon. Friend agree that the new mood of co-operation between the permanent members of the Security Council has given an opportunity for promoting the role of the United Nations, as first shown by resolution 688, in dealing with cases of genocide or near genocide in cases such as this? Will my right hon. Friend persevere with his triple policy of humanitarian aid to the Kurds, sanctuary for the Kurds, and economic pressure on Saddam Hussein?

Mr. Hurd: I am grateful to my right hon. Friend for his succinct analysis of the situation and the policy. The United Nations faces a difficult and crucial test. It has passed the test of reversing aggression. Very few in this House were in any doubt about the need to pass that test, nor about the effectiveness, speed and skill with which it was done. Such action was necessary and was done well. Now we face a more difficult problem, which we have been discussing for the past half an hour. It represents a more complicated test to the United Nations, but, in my view, it is just as important as the first test.

Dr. David Owen: As resolution 688 has been breached in every particular from the moment it was passed, and since President Bush has made it clear that he does not intend to put United States forces on the ground in Iraqi Kurdistan but will give air protection north of the 36th parallel, is it not the duty of the Security Council to pass a resolution for a UN peacekeeping force so as to provide a haven in Iraqi Kurdistan? If it is to be vetoed, let the world see which countries are prepared to veto or not to support such a resolution.

Mr. Hurd: I do not see any great advantage for the Kurds in putting forward a proposal of that kind at a time when and in circumstances in which it would not succeed. I do not think that the Kurds on the mountain tops would be powerfully impressed by that.
The right hon. Gentleman will have noted the phrases used by my right hon. Friend the Prime Minister under questioning on this point yesterday. I have given a rather careful amplification of them in what I said to the hon. and learned Member for Fife, North-East (Mr. Campbell). No one who has studied what we have said can be in any doubt about our firmness in the matter.

Mr. Robin Maxwell-Hyslop: My right hon. Friend and his Department have had ample notice concerning the specific case of a constituent of mine—a British-born constituent and her children—whose Iraqi


husband is in Sufwan camp and has applied to join his wife in the United Kingdom. What specific steps in which my right hon. Friend has confidence are being taken on a continuing basis to safeguard this man personally until the resolution of the question whether he is to be admitted to the United Kingdom?

Mr. Hurd: I am grateful to my hon. Friend and glad to be able to tell him that we have now authorised a visa allowing Mr. Jarah to enter this country.

Mr. Merlyn Rees: To pursue the long-term aim that the Secretary of State mentioned—that the Kurds should return home—has his Department evaluated the possibilities of that happening in anything less than the longer and longer term? For example, what conditions would have to be obtained from Baghdad before that could happen? What worries me is that I do not see it happening.

Mr. Hurd: The best way for it to happen is that the United Nations presence which has already begun and which is rather stronger partly because of our insistence should build up fast and solidly in the north of Iraq in and around the Kurdish homes, and that that presence should be so robust that the Kurds do not have to rely simply on assurances, which they already have from Baghdad, but can hear reports from their homes that it is safe to return. We are nowhere near that, but it is a resonable objective which lay at the heart of my right hon. Friend's proposal.

Sir Philip Goodhart: I welcome the vigorous response by the Government to the Kurdish crisis, but will my right hon. Friend remember that the United Nations High Commissioner for Refugees is desperately short of cash to deal with refugee problems in all parts of the world? Can he assure me that the extra money being devoted to Kurdish relief will not result in a diversion of funds from refugee relief efforts in other parts of the world?

Mr. Hurd: That point was powerfully put to me by representatives of the relief agencies who came to see me this morning. It is obviously important, especially because of the tragic needs in Africa, that the requirements not only of refugee work but of all relief agencies should not suffer because of what is happening in Iraq. My right hon. Friend the Minister for Overseas Development is making an announcement today about extra help for Africa——

Mr. Campbell-Savours: Where is she?

Mr. Hurd: She is joining in the opening of the new bank for eastern Europe, but she will make an announcement today about fresh help for Africa. My hon. Friend the Member for Watford (Mr. Garel-Jones), the Minister of State, is just about now in the Foreign Affairs Council in Brussels emphasising the importance of the Community responding in the way that my hon. Friend requests.

Mr. Jim Sillars: The Secretary of State speaks about people feeling secure, but they will feel secure only when the killing stops because the killing is the cause of the refugee flood. The Secretary of State implied that the Government and President Bush's Government would use air supremacy in the event of harassment of the

international relief effort. Will they apply the same equation and tell Saddam Hussein that air supremacy will be employed if the killing does not stop?

Mr. Hurd: When we discuss this area, we are talking about the military capability of the United States, and the hon. Gentleman should be aware of that. If the hon. Gentleman has studied what the Americans have said on this matter, he will know that it goes a long way. I am not authorised to add to that warning, but, as I said when reporting on my conversation with Mr. Baker on Saturday, the Americans clearly intend the warning to be taken seriously.

Sir Michael Marshall: Does my right hon. Friend agree that the scale of the problem of refugees from Iraq in Turkey and especially in Iran suggests that the problem will remain for a long time? Can he say more about the co-operation that we can extend to both countries, both bilaterally and through the United Nations?

Mr. Hurd: We are in close touch with the Turks. The Turkish Prime Minister is in London today and has been speaking to my right hon. Friend the Prime Minister. We are aware of Turkey's difficulties and we shall do our best, as part of the international effort, to build up Turkey's effectiveness and capability to the extent to which the Turkish Government feel the need. Our contacts with Iran have recently been less close than before for reasons which the House knows all about. Iran has a bigger refugee problem, and that is why I am anxious that my right hon. Friend the Minister of State, on her visit to the area later this week, should visit Tehran as well as the frontier areas, as the hon. Member for Cynon Valley (Mrs. Clwyd) has done.

Mr. David Winnick: Although there are good reasons, which I accept, why the allies did not proceed into Baghdad and finish the job which undoubtedly a large majority of British people wanted to see finished, does the Foreign Secretary agree that as long as Saddam Hussein and his murderous cronies remain in power there will be no peace or security in the region in accordance with Security Council resolution 678? Is he aware of the great strength of feeling in the country and in the House, not only about the horrifying stories in the press and on television about starving men and babies in arms, but about the continuing crimes and atrocities being committed in Iraq by Saddam Hussein's thugs? Is it not time that the allies made it perfectly clear that, if these crimes and atrocities continue, military action, which is provided by Security Council resolutions, will be taken? Surely the world cannot remain indifferent to what is happening in the area.

Mr. Hurd: There is no indifference, and I hope that what I and my right hon. Friend the Prime Minister have said shows that. There is no indifference here, in Europe or in the United States, which, of course, carries and will continue to carry the lion's share of the responsibility. The hon. Gentleman should be aware of that.
Perhaps I could amplify my answer to the hon. Member for Workington (Mr. Campbell-Savours), who asked about the first relief supplies. Eighty tons of relief supplies were flown to Turkey on 5 April, and they were the first airlifted supplies from any country to arrive in Turkey for the Kurds.

Sir Richard Luce: Does not this Kurdish tragedy highlight the fact that there is no sensible long-term solution to such tragedies by the provision of homes in other countries and permanent refugee camps but that the answer lies in the countries of origin where the tragedies are created? Does my right hon. Friend agree that it is essential for the United Nations to take a far more robust line on the gross abuse of minorities, in this case in Iraq, by the continued imposition of sanctions until the problem is solved?

Mr. Hurd: That is the third point of the plan which my right hon. Friend the Prime Minister outlined in Luxembourg last week. I entirely agree with my right hon. Friend.

Mr. Greville Janner: How many people have already died as a result of disease, starvation and our failure and that of the United Nations to bring adequate relief to the Kurdish people? Does the Secretary of State not see that, however worthy may be the efforts made so far, they are absolutely inadequate to meet the awful need that we see every night on our television screens?

Mr. Hurd: I agree that the efforts are not yet enough, but they are being intensified and multiplied. The Kurds need food, clean water, tents, blankets and basic medical care, particularly for women and children. It is not a question of sophisticated surgical equipment or other things that have been needed as a result of earthquakes and other emergencies in the past. It is important that precious time and precious money are concentrated on what is needed and not on extras. I cannot answer the hon. and learned Gentleman's question about how many people have died.

Sir Jim Spicer: My right hon. Friend rightly listed the basic necessities that must reach these poor, wretched people. We see every night on television that the law of the jungle prevails. The strongest get there first; they get the most and the weak are left on the sidelines. What steps have been taken to formulate a control, co-ordination and command structure? Even when supplies arrive in quantity, they are of no use unless they reach the people and unless priorities are established by someone on the ground.

Mr. Hurd: My hon. Friend is absolutely on the point. It is virtually impossible to provide an orderly distribution of help on the tops of mountains. That is why, temporarily, some refugees are, quite rightly, being allowed into Turkey and Iran where it is possible to help them in a more orderly fashion. In Turkey, aid is being organised by the Turks and the Americans; in Iran, it is being organised by the Iranians, the Red Cross and, I hope, increasingly by the United Nations. Although those are not the best answers, they are necessary answers. The real answer is to enable and encourage the refugees to go home and to provide effective and secure help for them there. My hon. Friend is right to say that it is a matter not simply of getting the supplies to them but of distributing those supplies in a reasonably orderly and fair manner.

Mr. Giles Radice: Does the Secretary of State agree that, having more than tacitly encouraged the Kurdish uprising, the international community has a real responsibility to the Kurds? Is it not all the more

urgent and essential that there be United Nations intervention, under the UN convention on genocide, to prevent genocide from continuing?

Mr. Hurd: I answered fully a similar question put by the right hon. Member for Manchester, Gorton (Mr. Kaufman) and have nothing to add.

Mr. Anthony Nelson: How long can we and other Governments pick up the tab for a humanitarian problem that Saddam Hussein would dearly love to export? Will the Government continue to insist that sanctuaries in Turkey and Iran are no substitute for safe havens in Iraq, and that a return to their homelands must be by supervision rather than intervention? Once the principle of the inviolacy of sovereign nations is breached, we are all lost.

Mr. Hurd: I follow my hon. Friend's point. We are encouraging the United Nations to take action that is virtually—perhaps wholly—unique in its history: to mount a huge international relief operation as urgently as possible in a country like Iraq, insisting on co-operation and ensuring that that effort is not harassed or frustrated. That is the right way to reconcile the two considerations that my hon. Friend mentioned.

Mr. Robert N. Wareing: Is the Secretary of State aware that many in this country who believed that the only way to bring peace and security to the middle east was the overthrow of Saddam Hussein now believe that, having encouraged the uprising of the Kurds and others against Saddam Hussein, President Bush, not to mention the Prime Minister, is now acting like Pontius Pilate and something realistic should be done? How much of the £29 million aid from this country is reaching the Kurds? Is it not a fact that the money is going into a pool to help all those who suffered in the Gulf war?

Mr. Hurd: The hon. Member used the word "realistic". I hope that what I have said about what we are doing is realistic. Some of the other suggestions are unrealistic. We have to be, and are being, vigorous and energetic on this matter, and the outline that I have given to the House shows that.
There is a problem of supply and distribution in terms of the aid given, hut, certainly in Turkey, we are increasingly looking to buying local food rather than shipping food from here. That would now be a good deal more effective. We want to get the supplies in effectively by air drop and, increasingly, by helicopter, because that is more sensible in terms of orderly distribution, not just to the Kurds, but to all people in distress in Iraq, including Shias in the south. We are not talking exclusively about the suffering of Kurds because others are also suffering.

Mr. Ivor Stanbrook: Is not the crux of the problem the fact that the dictator of Iraq is a wicked and bloodthirsty tyrant and that as long as he remains the policy of the violent repression of the minorities will continue, and no guarantees offered by any Iraqi Government are worth anything? What can be done about getting rid of Saddam Hussein?

Mr. Hurd: The suggestion is sometimes made that, instead of bringing the war to an end, we should have marched on Baghdad and overthrown Saddam Hussein. The hon. Member for Walsall, North (Mr. Winnick) nods in agreement. The House should consider the ramifications


of that suggestion and consider why neither the previous Prime Minister or the present Prime Minister nor President Bush has ever endorsed that aim. One would have not simply to overthrow Saddam Hussein but to choose, implant and sustain a successor, month after month, year after year. That is what I mean by being realistic.

Mr. Robert Hughes: Is the Foreign Secretary aware that the immense revulsion and groundswell of opinion in this country arises, not only because of the terrible tragedies portrayed on television screens, but because the British people, like the Kurdish and Shia people, read President Bush's lips when he said that the people of Iraq must rise and oppose President Hussein? Having willed the means and that means having failed, does the Foreign Secretary realise that we now expect the coalition to pursue the freedom and protection of the Kurds and Shias with the same resolution as the liberation of Kuwait was fought for?

Mr. Hurd: I described what the British Government are doing, and the record of the House and the Library contain what British Ministers have said about our aims and objectives throughout the affair. No one could seriously accuse us of lack of energy, realism or will, either in the earlier phase or in what we are doing now.

Mr. Nicholas Budgen: Does my right hon. Friend agree that it is at least possible that the Shias and Kurds were encouraged to take up arms against the Iraqi Government by the words used by the western leaders? Would it not be truly dreadful if they were encouraged to fight on by vague talk about the use of force on their behalf when President Bush has already said that the forces of the United States will not engage in a civil war in Iraq?

Mr. Hurd: The President said that, and he also said, as I quoted in my statement:
We will not tolerate any interference in this massive international relief effort".

Mrs. Audrey Wise: Will the Foreign Secretary tell us exactly how much aid the United Kingdom has given in terms of pounds, not ecus? How much do we intend to give, and how much did we spend on the war? How many aircraft and helicopters have we mobilised for a relief operation, and how many did we mobilise during the war?

Mr. Hurd: As my right hon. Friend the Prime Minister announced, the sum involved is £20 million, of which £12 million will go through the EC as a result of the decisions taken last week. The remaining £8 million will be reserved for the direct British help, including help to our own non-governmental organisations. I hope that our agencies will apply for help through contributions from the European Commission in Brussels. I can give the other figures for which the hon. Lady asked, but not without notice. I hope that she is not implying that there has been any falling away of vigour. That is not borne out by the facts and figures that I have given or by the plans that I have announced.

Sir John Stokes: In view of the mood of the House, and in view of what I am about

to say, may I remind my right hon. Friend that I spent nine months in Kirkuk and Kurdistan in the last war, and that I like and admire the Kurds? If I read the mood of the House right, it wants military intervention by our forces. I believe that that would be wrong and dangerous. I am worried that some of those who call loudest for military intervention are those who would deny us proper arms to defend ourselves.

Mr. Hurd: My hon. Friend advances a robust argument that I have not been making in those terms. Before some hon. Members put forward plans—sometimes rather grandiose ones—for the future government of Iraq, I urge the House to consider the realities and to ask itself who would carry out such plans.

Mr. Gavin Strang: Does the Secretary of State accept that there is no simple and comprehensive solution to the tragedy, and that certainly military action in Iraq is not such a solution? As it is clear that our priority must be to reduce the dying of babies, their mothers and others in the mountains, is not the best short-term, practical solution—albeit not a very satisfactory one—to encourage Iran and Turkey, perhaps through bribes and inducements, to allow many more people to come down from the mountains so that they can be supported in less hostile climatic circumstances?

Mr. Hurd: The hon. Gentleman puts it entirely right. That is an immediate necessity, and one that we have been urging on the Turks. The Iranians have allowed their border to be open fairly consistently. As the hon. Gentleman would concede, however, it is not the right long-term answer. That answer is to enable the Kurds to return to their homes in safety.

Mr. David Tredinnick: I greatly welcome my right hon. Friend's statement, having argued in the House two weeks ago that we should be dropping aid to the Kurds. Is it not a fact that great responsibility lies with the Americans, who incited through a CIA-promoting radio station the Shias and the Kurds to revolt? Is it not a fact that history will relate that, while President Bush fiddled, Kurdistan burnt?

Mr. Hurd: I am not answering for the sort of activities, or allegations and suggestions relating to them, to which my hon. Friend refers. What we have said about the internal situation—what my right hon. Friend the Member for Finchley (Mrs. Thatcher) said when she was in charge of the Government and what my right hon. Friend the Prime Minister has said since then—is on the record. I do not believe that the remarks of my right hon. Friends and others bear the sort of construction that is sometimes rather loosely put upon them.

Miss Kate Hoey: Does the Secretary of State agree that, while in the long term the only solution is the establishment of a form of homeland for the Kurdish people, the immediate and overriding priority is to get the Kurdish people off the mountains? As the Turkish Prime Minister is now in Britain, will the right hon. Gentleman assure me that the Prime Minister will ask him, the Turkish Prime Minister, to consider whether his country could do more, despite the difficulties that it is undergoing, and open its borders and so let the people off the


mountains so that the humanitarian aid that is going to them can be organised properly to ensure that it reaches those in need?

Mr. Hurd: That is precisely the course of the conversation which my right hon. Friend had with the Turkish Prime Minister today.

Mrs. Edwina Currie: Does my right hon. Friend accept that the tremendous efforts made by the British Government to bring immediate help to the Kurdish and other people are widely recognised and that he does not need to feel in the least defensive about what we have done so far or what we intend to do? Does he agree that to talk about Kurdistan as we heard the hon. Member for Cynon Valley (Mrs. Clwyd) do on television at lunchtime—which was not at all what her boss said in the House a few moments ago—is extremely dangerous? Trying to carve up the areas of the middle east on supposed tribal lines in the conference halls and chambers of the west is exactly what we did 70 years ago and has resulted in a great deal of unhappiness since.

Mr. Hurd: The countries of the area disagree about most things, but they are all clear about one thing—the need not to meddle with frontiers. But within frontiers it is entirely reasonable and right, as I said on 13 March in the House, that the Kurds should enjoy autonomy and decent respect for their way of life. That is our view and that must be the long-term aim.

Mr. David Young: Did not the Government go along with President Bush when he argued for revolt within Iraq? Was not part of the problem caused, as General Schwarzkopf said, by our being suckered into allowing Iraq to use helicopters? Will the British Government press the American Government to make a clear and concise statement that any aircraft used by the Iraqis to harass the refugees or those bringing them aid will be shot down? What discussions has the Secretary of State had with adjoining territories such as Turkey, which have their own Kurdish problems, to ensure that the refugees can be accommodated and that those problems do not stop aid to those who are dying?

Mr. Hurd: On the hon. Gentleman's first point, I have referred in careful terms to the emphasis which Mr. Secretary Baker placed when I spoke to him on Saturday on the warnings which the United States has made about Iraqi military activity. I refer the hon. Gentleman to that. On his second point, he is right. Of course, both Iran and Turkey include large numbers of Kurds and at various times in the past have had substantial reservations and difficulties as a result of that. But to do both the Turkish and Iranian Governments justice, they are not letting those sensitivities get in the way of help. We are urging them in that direction—certainly the Turks. When the Minister of State, Foreign and Commonwealth Affairs, my right hon. Friend the Member for Wallasey (Mrs. Chalker), goes to Iran, no doubt she will do the same.

Mr. Harry Greenway: Why is the distribution of aid so haphazard that loads are thrown at people in masses, as we see on television? Can something be done to underline what my right hon. Friend said to my hon. Friend the Member for Dorset, West (Sir J. Spicer)

about securing orderly distribution so that we do not see simply survival of the fittest and the law of the jungle operating?

Mr. Hurd: Dropping food or anything else in large pallets from fixed-wing aircraft is an unsatisfactory way of getting relief through. The only thing to be said for it is that it is quick. If there are no roads to the mountain tops and no places where helicopters can land, it is the only way of getting supplies through quickly. However, it is imperfect. It is not the best way. It produces the hazards and sometimes tragedies to which my hon. Friend refers. That is why the Americans on a larger scale and we on a substantial scale are building up the helicopter effort, which enables much better distribution.

Several Hon. Members: rose——

Mr. Speaker: Order. I had hoped to be able to call all hon. Members, but I think that I shall not now be able to do so. I shall call three more from each side and then we must move on as we have a busy day ahead of us and a prayer this evening which must end at 11.30 pm.

Ms. Dawn Primarolo: The Foreign Secretary must be aware that the British people are appalled that the so-called liberation of Kuwait has unfolded into the massive tragedy that we now see on our screens every evening. Compared to the vigour with which the Government pursued the liberation of Kuwait, their commitment to the refugees can only be described as relative inertia.
The right hon. Gentleman, in his statement, mentioned Iran. Many thousands of refugees are moving towards Iran and I have a constituent whose entire family are there. They have been turned away from the British embassy when trying to make contact with their relatives here in Britain. What undertakings can the Secretary of State give about arrangements that will be made in Iran not merely so that one visa may be granted but to allow refugees with families in Britain to contact them and to ensure that the proper relief structures are put in place there?

Mr. Hurd: I do not know why the hon. Lady talks about the "so-called" liberation of Kuwait. That demonstrates a cast of mind that somewhat clouds her judgment on the rest. I do not believe that what this country has been doing to get the relief effort going could conceivably be called inertia since we were first in the field and are perhaps pressing for the build-up of the international effort more energetically than anyone else.
If the hon. Lady will give me the details of the case that she mentioned I shall look into it. At present the embassy in Tehran does not issue visas.

Mr. David Atkinson: Notwithstanding the reply that my right hon. Friend gave to my hon. Friend the Member for Derbyshire, South (Mrs. Currie), can he confirm that this uprising is only the latest in many by the Kurds in response to their demands for self-determination, which was promised to them by the great powers after the first world war, under the treaty of Sevres in 1920? As long as the rest of the world continues to ignore that demand for self-determination, there will always be such uprisings, which will be brutally put down. Will he ensure that that matter, along with self-determination for the Palestinians, is sought to be resolved in the wake of the outcome of the Gulf war?

Mr. Hurd: The Kurdish leaders who came to see my right hon. Friend at No. 10 Downing street last week were clear that their demand was for autonomy within Iraq. That seems to me to be an entirely reasonable aim for them and one that we can certainly support.

Mr. Dave Nellist: Why should the Kurds, the Shias or any other oppressed people trust western Governments, especially this Government and the Bush Administration, ever again? Clearly they were asked to rise up against a brutal dictator and, having put their trust in Governments—which I would not have done—perhaps bemused by the poetic phrases about the rights of small nations, they have been betrayed. Why are a million people on the borders of Turkey and Iran worth £20 million when a million people oppressed by the same Government in Kuwait were worth £3,000 million? That is the difference between the amount of aid to the Kurdish people and the money spent on the war in Kuwait.

Mr. Hurd: The hon. Member would have left Kuwait under Saddam Hussein's rule. I cannot think why that would have been of any advantage to the Kurds.

Mr. Richard Alexander: My right hon. Friend has properly laid emphasis upon the importance of getting the Kurds back to their homes. Is not the key to that a guarantee that when they get there they will be able to live in safety? Is not the message coming through to my right hon. Friend from the House and from outside that the United Nations, which could send peacekeeping forces to do that, is being less than robust in attempting to do so?

Mr. Hurd: The right hon. Member for Plymouth, Devonport (Dr. Owen) also put that point to me, and I answered it in terms that I consider to be realistic. I followed carefully my right hon. Friend the Prime Minister's words on television yesterday. I do not exclude the possibility of such an answer any more than he did, but I know that it would not succeed now.

Mr. Nigel Spearing: Does the Foreign Secretary recall that, during our debate on 21 January after hostilities had begun, I urged him to set up two working parties? The first would review the objectives and operations of the United Nations to take advantage of the new circumstances following the end of the cold war; the second would examine the organisation of the relief and rehabilitation that would certainly be required when hostilities ended. The right hon. Gentleman may also recall that I sent a letter backing up what I had said with further suggestions, to which he gave what I would call a typically Foreign Office reply. What specific action did he take?

Mr. Hurd: The hon. Gentleman's first suggestion lies outside the terms of my statement. I have already answered his second point: the United Nations disaster relief organisation anticipated—and asked member states to anticipate, and contribute accordingly—a movement of refugees out of Iraq after the war, and we have contributed.

Mr. Patrick Nicholls: If no direct action is taken against Saddam Hussein following what has happened to the Kurdish people, we can only conclude that no act is barbaric enough for the international community to intervene, provided that it is inflicted by a Government on their own peopole. Is not the logical

conclusion of such thinking that the only crime committed by Hitler that justified intervention was his failure to restrict the slaughter of Jews to his own countrymen?
Although I understand the logic of the position that the Government have adopted, constituents whom I have met over the past two weeks have not understood it, and I for one am at a loss to explain it to them.

Mr. Hurd: I am not sure whether my hon. Friend is suggesting that his constituents who served in the Gulf should now be on duty in Baghdad, but that is the implication of what he has said. I rather agree with my hon. Friend the Member for Halesowen and Stourbridge (Sir J. Stokes).
There is no doubt about the indignation that is felt about the suffering of the Kurds, or about the importance of mounting an effective operation—not just dropping food, but ensuring that relief is protected and that the Kurds will eventually be able to return to their homes. That, surely, is a realistic course on which the international community is agreed, as is shown by, in particular, resolutions 687 and 688.
If, however, that course were frustrated and did not succeed—as I have made clear in answer to several questions—a different position would arise, and the Security Council would have to address it. If my hon. Friend the Member for Teignbridge (Mr. Nicholls) is suggesting that we should now put our troops into Baghdad and install a new ruler—or that we should have done so in the past, and should now be sustaining that new ruler—he is verging on what I, perhaps with a good many other people in this country, regard as unrealistic territory.

Mrs. Ann Clwyd: I have just returned from a five-day visit to Iran and Iraq. I have seen for myself the most abject misery—misery that I had not believed possible. The scenes are indescribable. I saw a 60 km line of cars stuck on a hilltop, where they have been for more than 11 days waiting to cross the border to Iran. Those who have managed to cross the border, however, are still experiencing dreadful conditions. They are at the top of a mountain about the same height as Snowdon, in winter conditions—freezing at night and bitterly cold during the day—and without proper cover. The makeshift tents that they have constructed are made of the thinnest plastic, the kind in which clothes are returned from the cleaners. It is entirely impracticable as a protection from the weather.
Mothers who have crossed the border to Iran are trying to shelter their children. A mother with a baby in her arms came up and asked me to take it to hospital: it was cold, blue and clearly going to die. I had to turn away because there were hundreds of others in the same condition. I saw the food deliveries. We have seen pictures of that on television. It is exactly like that. Desperate people are scrabbling for food. Again, that is on the Iranian side of the border. On the other side of the border, people have managed to bring in some supplies—those who are lucky enough to have some form of transport. Others have no means of transport. Barefoot, they have walked many long miles—taking over 10 days perhaps to walk to the border. Some of the women are wearing totally inadequate clothes. They look as though they have come straight out of their homes, without any protection. When I went there with a group of diplomats, including ambassadors, who had witnessed scenes of famine, flood and earthquake all over


the world, they said that never before had they seen such scenes. The same is true of the aid workers whom I met there.
I saw no signs of British aid on the Iran side of the border. That aid may have gone to Turkey, but it certainly had not gone to Iran. I asked many reporters in the area, but they said the same—that there was no evidence of British aid. The only aeroplane that I saw on the airfield was a Russian aeroplane.
I raised the matter in the House before the Easter recess and asked what the Government proposed to do at that time about distributing humanitarian aid to the whole of Iraq. We have, as the Foreign Secretary knows, the statement of the United Nations team that has been into Iraq. The team described is as a catastrophe and set out the need for medicine, food and clothes.
The Red Crescent in Iran, with whose director I spoke early last week, has managed to cope so far with the enormous influx of refugees. The situation is obviously much worse in Iran—a point that I stressed to the Foreign Secretary—because I million people have already crossed the border and the estimate is that another 1 million people may be trying to get across the border. Iran, therefore, desperately needs help. The Red Crescent in Iran says that is has come to the end of its tether. It has had experience of dealing with earthquakes and the Iran-Iraq war. To some extent, they were prepared, in that they had camps close to the border and a certain number of tents. When the Red Crescent asked the Save the Children Fund for help—a group of its representatives was present when I spoke to the director of the Red Crescent—it asked particularly for tents but it was told by the Save the Children Fund that it did not have in the United Kingdom a supply of tents in the numbers needed. What they need most of all are tents, clothing, powdered milk for the babies, food and teams of doctors and nurses.
I saw a French team of 150 doctors from Medecins Sans Frontieres, which is well known to everyone, and asked why such an organisation can get a group of doctors quickly into a disaster area while we, who have faced similar tragedies in many parts of the world, cannot. I met the French aid Minister who had been in the area for six days. He felt desperate about the situation and said that he was going back to report o President Mitterrand in Paris.
I urge the Government to give particular attention to the needs of Iran, which has coped very well so far, but it cannot do so any longer. The governor of west Azerbaijan, where the main bulk of the refugees are going, said that 80 per cent. of the refugees were in hospitals in his province and that 800 emergency surgical operations have been carried out on the refugees. Injured people are still to be found on both sides of the border.
On Saturday I travelled about 40 miles into Iraq. I heard the shelling coming from Sulaymaniyah, which at present is held by Iraqi troops. The shells were aimed at Kurdish fighters on the hillsides surrounding the town.
I spoke to the main Kurdish leader, Jalal Talabani, in his headquarters, hidden away in the hills. He said that, although he was grateful for any suggestions as to how the desperate situation in which Iraq finds itself might be solved, he could not understand why the international community, if it were prepared to offer safe havens within Kurdistan, could not make the whole of Iraqi Kurdistan a safe haven for the Kurds. That is a matter that will have to be addressed. Talabani said that he was not in favour of safe havens, as such areas would be surrounded by areas

of hostility. He is in favour of a political solution that will enable the Kurdish people to live in peace in their own country. As the Foreign Secretary has said, what the Kurdish people want is autonomy within Iraq. That is the very least that the international community should aim to provide.
The situation is desperate, both for the Kurds and for the Shias. There are United Nations resolutions under which the international community could take action. I appeal to the Government to do everything in their power to deal with the situation, including the provision of aid on a vastly increased scale. I am not convinced that aid has been provided on anything like the necessary scale. Most of all, I appeal to the Foreign Secretary to aim for a political solution to the dreadful situation in which the Kurdish and Shi'ite people find themselves. Saddam Hussein is still killing, killing, killing, in Iraq. This is genocide, and it calls for an international response.

Mr. Hurd: The hon. Member for Cynon Valley (Mrs. Clwyd) has drawn on her memories of the immediate past. At the meeting that I had this morning, there were three or four other people, including Dr. Barrow of the Overseas Development Administration, who had recently returned —some of them last night—from various parts of the area, and whose vivid recollections bear out entirely what the hon. Lady has just said. The House will have found no hint of exaggeration in her description of what she witnessed.
It is certainly true that the help that we have been providing on an increasing scale has gone overwhelmingly to the Turkish side of the border. However—and I said this before the hon. Lady asked me to do so—it is clear that, in terms of size, the greater problem arises on the Iranian side. It may have been since the hon. Lady's departure that we flew the first supplies directly to Iran. We shall continue to provide supplies.
The problem is how to get them up to the area where they are needed. Just before coming to the House, I saw a telegram to the effect that the closest airport is too small to receive aeroplanes of the type needed to carry them. Indeed, some planes have had to be turned away and sent to Tehran, which is hundreds of kilometres away.
These are the problems with which the United Nations High Commissioner for Refugees, Mrs. Ogata, who is now in Iran, is wrestling. The focus of the international effort —without our ceasing to build up on the Turkish side— will increasingly have to be Iran and the problems that the hon. Lady has described. She referred to people sitting miserable in cars—some of them dying. That reflects completely other comments that I heard this morning.
On the political side, I cannot sensibly add to what I have said already. The objective that the hon. Lady heard voiced by the Kurdish leader is the one that was explained to my right hon. Friend the Prime Minister when he met similar Kurdish leaders in London last week. That must be the right objective, and it can be achieved only by steady steps. I repeat that the first steps must involve efforts to prevent people from dying on the tops of mountains; the second must be to get people—immediately, if possible —into Turkey and Iran; the third must be to enable them to return to their homes. That will require not just the provision of aid but United Nations action that has not previously had to be taken in this form. I refer to the need to ensure that people may return home in safety and confidence.
The Government will take seriously the points that have been made during these exchanges not least those raised by the hon. Lady.

Mr. Speaker: I shall ensure that hon. Members who were not called to put questions on this statement are given some priority when we next return to the subject.

Question Time

Mr. Simon Hughes: On a point of order, Mr. Speaker. I realise that, by comparison with the subject that we have just been discussing, this is a very small point.
When the Minister for the Arts was answering questions today he made a remark which, on the face of it —though I am sure it was not intended—could be misleading. On the subject of the London borough grant committee, he said that Labour and the Liberal Democrats had a majority. That is true, but the budget requires a two-thirds majority vote, and it is Conservative members who are blocking the resolution ——

Mr. Speaker: Order. I cannot be responsible for adjudicating on the accuracy of answers that are given in the House. The hon. Gentleman must find another opportunity to raise this matter. It is not one for me.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the draft Planning (Northern Ireland) Order 1991 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Local Authorities (Members' Allowances) Regulations 1991 (S.I., 1991, No. 351) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Local Authorities Etc. (Allowances) (Scotland) Regulations 1991 (S.I., 1991, No. 397) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the National Health Service Trusts (Consultation before Establishment) (Scotland) Regulations 1991 (S.I., 1991, No. 358) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the National Health Service Training Authority (Abolition) Order 1991 (S.I., 1991, No. 327) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Chapman.]

EUROPEAN STANDING COMMITTEES

Ordered,
That the Court of Auditors' Special Report No. 2/90, relating to management and control of export refunds, and European Community Documents Nos. 4549/91, relating to the development and future of the Common Agricultural Policy, and 5032/91 Add I to III, relating to the prices for agricultural products and related measures (1991–92), shall not stand referred to European Standing Committee A.—[Mr. Chapman.]

Orders of the Day — Export and Investment Guarantees Bill

As amended (in the Standing Committee), considered.

Mr. Simon Hughes: Further to my point of order, Mr. Speaker.

Mr. Speaker: Order. I do not see how there can be anything further to be said about the matter. As I have said already, it has nothing to do with me. I do not know whether what the Minister said was right or wrong.

Mr. Hughes: It is a procedural point, Mr. Speaker. Such matters have often been raised with you. My understanding is that a point of order relating to questions may be taken immediately after Question Time.

Mr. Speaker: Order. The hon. Member knows that if something disorderly has occurred during Question Time, that is the point at which it should be raised. However, it is not disorderly to disagree with an answer.

New Clause 1

DEVELOPING COUNTRIES

"The Secretary of State shall make arrangements to ensure that ECGD's services to developing countries are effected in coordination with the services offered by all other government departments or agencies involved in assisting developing countries or in assisting British firms to supply goods or services to developing countries.'.—[Ms. Quin.]

Brought up, and read the First time.

Ms. Joyce Quin: I beg to move, That the clause be read a Second time.
The new clause introduces into the debate on this legislation an element that was not really covered at the Committee stage. We are concerned about how the ECGD's services will fit into the overall trade and aid arrangements between the United Kingdom and develop-ing countries. It has been pointed out to me that the equivalents of the ECGD in many developing countries are involved more closely in co-ordinating facilities for the promotion of trade and aid. A number of west European and other developed countries have state facilities to assist their industry to identify, and to develop involvement as technical partners in, sources of know-how and technology in projects in developing countries. Such projects often lead to opportunities for funding and for the supply of goods and services. There are such business development facilities in the Netherlands, Denmark, Germany, France, Finland, Ireland, Austria and Switzerland, as well as Japan and the United States of America. Business concluded via this system is very much in the national interest of the countries concerned and we believe that a similar approach by the United Kingdom would be in our national interest.
It is unfortunate that the Bill, in its present form, does not contain a provision that would enable the Secretary of State to make arrangements to give such guarantees as appear to him to be in the national interest, even though the original Act—the Export Guarantees and Overseas Investment Act 1978—does contain such a provision. For two reasons, the provisions of our new clause would be


very much in our national interest. They would certainly enable British industry to become involved at an early stage in business with developing countries. If British industry is not involved at an early stage, the way is open for other countries, and, because of their more co-ordinated structure, it is easier for them to become involved at an early stage.
Such an arrangement would be in the interests of developing countries, so the system proposed in new clause I would improve our aid and development efforts. It is important for Britain to avoid losing out in trade with developing countries. Similar considerations also apply to our trading relations with eastern Europe and the Soviet Union and to the use of ECGD in that context as we appear to be losing out to other countries because of our lacklustre approach. However, as new clause 1 is about developing countries, I shall resist the temptation to say too much about eastern Europe and the Soviet Union, although I believe that I have made an important point.
Using Indonesia as an example of a developing country, I shall quote part of an article which appeared in The Independent on Sunday on 31 March. It states:
Her Majesty's Treasury moves in mysterious ways, as the Government of Indonesia will testify. In 1989
our then Prime Minister
was touring the Far East, vigorously waving the flag and helping British companies pick up business in Jakarta.
Because Indonesia is poor, the British Government lets it pay with low-interest loans called mixed credits, which are backed by the government export credit agency, ECGD.
An umbrella arrangement for such deals was due to expire on 30 November last year, so when two telecommunications contracts and one for railway refurbishment, worth £89 million between them, came close to signature, the Department of Trade, the exporters and the embassy in Jakarta put pressure on the Indonesian government to sign by the deadline.
It did, and then waited for the financing arrangements to be finalised—which would normally take about 10 days. It is still waiting. The exporters and their bankers are furious, for they see this delay, linked to the introduction of a new premium system, not only as potentially damaging to business in a fast-growing market, but also as a sign that the Treasury is yet again throwing spanners into the works of ECGD.
That example bears out the worthwhile nature of new clause 1 which envisages a system in which such delays would not occur.
I wonder whether the Minister has seen the interesting proposals by Mr. Andrew Brzozowski of the Commonwealth Development Corporation. He suggests a one-stop bureau, a British industries overseas projects development bureau, which would achieve the co-ordination for which we are asking and ensure that ECGD services were brought into a network that would operate efficiently for British industries in developing countries. I refer in particular to part of the paper by Mr. Brzozowski where he points out that a number of countries have one-stop project promotions offices run by multilateral aid organisations with national Government funding. There are no similar one-stop facilities in the United Kingdom, and the Commonwealth Development Corporation, and Mr. Brzozowski in particular, feel that the Government should consider such an approach. I shall be interested to hear the Minister's response. Such a network would aim to bring together potential United Kingdom know-how and technical partners to joint ventures in developing countries. It would draw attention to the finances available, including grants, concessional finance, export

credits and commercial funding, and would provide a vehicle for assisting the development of a total United Kingdom response to major projects.
The Minister may remember that in Committee we referred to the example of an exporter who was interested in establishing a telecommunications project in Kenya but was unable to get export credit assistance from the ECGD. The Minister subsequently sent me an unsatisfactory reply which did not give any hope that such facilities would be available to that exporter in future. If there were a co-ordinated system, as we are suggesting in new clause 1, the chance of that exporter getting ECGD assistance would be improved and he would be aware of other sources of assistance. For example, he would be referred automatically to the Commonwealth Development Corporation. I understand that that would not be the case at present.
Many of our major industries would be interested in the system proposed in new clause 1. For instance, companies in the Export Group for Construction Industries are involved in many large-scale projects in developing countries and are well aware of the value of ECGD services. They want those services to continue and to be efficiently and effectively organised in future.
Perhaps I should make it clear that, although I am anxious that we benefit from project and trade opportunities in developing countries, nothing that I have said so far undermines our comments and the amendments that we tabled in Committee. We expressed concern about the scale of military exports and sought to ensure that any project in developing countries should comply with environmental safeguards. However, we believe strongly that an effective co-ordinated system would be a good way of organising future projects in developing countries.
The Minister may say that the new clause goes rather wide of the Bill. That would be a fair comment, but we seek some reassurance on how the system will work in future. We know that there have been some moves to co-ordinate the export services of the Department of Trade and Industry and the Foreign Office recently, but our aim, and Labour party policy, is to ensure that all export promotion interests, including the Government and other agencies working with developing countries, are properly co-ordinated. For that and all the other reasons I have given, we hope that new clause 1 will get a sympathetic response from the Government.

The Minister for Trade (Mr. Tim Sainsbury): I am certainly sympathetic to the objectives that the hon. Member for Gateshead, East (Ms. Quin) set out. However, I fear that I will disappoint her by saying that, although I am sympathetic to her objectives, I cannot be as sympathetic to new clause 1. Perhaps she recognises that the legal and practical effects of new clause 1 are rather unclear. It is not at all clear to me or to any rational reader how it would attain its objectives. Another problem is that the hon. Lady's remarks seem to be based on an assumption that ECGD support is always helpful to a developing country.
In effect, ECGD support is another form of commercial loan. There is a real problem —although we wish that it did not exist—that when a country is unable to service its existing foreign debt, it does not seem helpful to add to its burden of indebtedness. Quite the opposite. The hon. Lady


used Kenya as an example. That country has a problem servicing its existing debt burden. In those circumstances, it is more appropriate to give aid in another form.
Having said that, I assure the hon. Lady that we are conscious of the importance of co-ordinating the Whitehall machinery for aid and the activities of ECGD in respect of trade. Machinery exists for co-ordinating those activities with those of other Departments concerned with developing countries and third world development. We should not fall into the trap of confusing the role of the ECGD with that of the ODA. The ECGD's function is not to provide assistance to overseas countries, but to encourage British exports by providing services to industry here. We recognise that there is a need to co-ordinate ECGD's activities with those of the ODA and of the DTI and I assure the hon. Lady that machinery exists for that purpose.
First, in respect of export projects assisted by the aid and trade provision, for which ECGD cover for the related commercial export credit is a normal pre-requisite, long-standing procedures exist which ensure that the interests of ECGD, the ODA and the DTI are effectively co-ordinated.
Secondly, in respect of commercial export credits supported by the project group—I think that I am right to say that the hon. Lady referred broadly to commercial export credits—further machinery exists to ensure that the views of all interested Departments, which could include the Ministry of Defence, the Foreign and Commonwealth Office and the Treasury, are brought to bear in assessing the national interest case for giving cover.
5 pm
The hon. Lady will appreciate that national interest can encompass a wide range of factors—employment, security and diplomatic and trade factors. However, it can also include the developmental benefits to which she referred. A formal Whitehall committee of officials exists to co-ordinate the views of different Departments.
I said that I was sympathetic to the objectives of new clause I, but the machinery for which it asks already exists. We would not wish to confuse the role of the ECGD with that of the ODA and we do not believe that it is helpful to add to the burden of debt of a country that already suffers severely from excessive debt. I cannot ask the House to accept the new clause, I urge hon. Members to reject it.

Mr. Jim Cousins: The Minister's answer is much less impressive than it should be, because he has merely outlined precisely the point made by my hon. Friend the Member for Gateshead, East (Ms. Quin). There is no co-ordination of the Government's activities. The Minister mentioned a range of Departments, all of which are dabbling and meddling in different respects with different functions and purposes. He said that it would be unkind and unfair to ask developing countries which already have a substantial burden of debt to incur even more. That is fine, but where does that leave an exporter who wishes to trade with Brazil, Mexico or Nigeria? My hon. Friend asks for systematic, publicly known and well co-ordinated arrangements to deal with precisely that issue.
My hon. Friend alluded to a key issue which concerns us all, which is that on the question of military exports,

there is great confusion between the Ministry of Defence, the Department of Trade and Industry when it issues export licences, the ECGD and other Departments that might be involved. That is of great significance. We have heard a major statement in which co-ordination was one of the hidden themes which underpinned the discussion on that statement. The Minister merely said that a range of public and semi-public agencies such as the banks and others are engaged in this issue, but offered no assurance that they are co-ordinated, which is the purpose of the new clause.

Ms. Quin: The Minister said that he feared that his reply would disappoint me. I can at least say that he has been consistent, given his replies to the amendments that we tabled in Committee, where he was unwilling to accept the many excellent ideas that were suggested by my hon. Friends and I.
I am grateful for the comment made by my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) because it reinforced the points that I made. Those points were made properly and related to the position of developing countries as well as to the need for British industry to be involved in those countries as much as possible.
I did not intend the new clause to increase the indebtedness or the debt burden of developing countries and I do not believe that it would do so. We merely sought to ensure that the ECGD is brought into an overall system of aid and trade assistance and that the machinery of government and the co-operation between the Government and other relevant agencies work smoothly and effectively. From the evidence that I have seen of the way in which many European countries do that, I believe that it is something we should at least consider in detail and decide whether we should alter the way in which we organise such matters. We believe that the interests of aid and those of British industry are not necessarily incompatible. Therefore, the two should work together as much as possible in pursuit of a variety of objectives.
My hon. Friend the Member for Newcastle upon Tyne, Central referred to the debate on military exports and I referred to considerations of the environment, but those issues are not, in themselves, arguments against the co-ordinated system for which we ask. In many ways, they reinforce the request for such a system, because such considerations could be built into the system at an early stage. That would work in the long-term interests of us all.
I hope that the Minister will at least be prepared to examine closely the proposals to which I referred from the Commonwealth Development Corporation—which have been around for some time—and discuss with that organisation how the work of his Department on exports and on relations with developing countries could fit into its concerns. The new clause was devised not in a vacuum, but in response to difficulties that we know exist. Despite what the Minister said, we do not believe that the mechanisms exist to ensure that if an exporter does not receive ECGD cover for a project that he has in mind, he is automatically referred to other agencies which could assist him. There seem to be gaps in the system and exporters do not get the information that they would like. The information may not be available in sufficient quantity at a regional or local level. As the Minister knows, we raised in committee the


question of the desirability of proper regionalised services linking ECGD and other export services and a later amendment refers to a regionalised network.
We are aware of the gaps in the system which affect exporters and which can therefore lose valuable orders for this country and discourage exporters from trying to use the service in the future. We do not want a system that deters exports, but one that favours exports and their expansion in he future. Therefore, we do not apologise for raising this issue. We are disappointed by the Minister's response, but we shall not press the new clause to a Division.

Question put and negatived.

New Clause 2

POLITICAL RISK REINSURANCE

'( )-(1)—The Secretary of States may make arrangements for insuring any person providing insurance with a view to facilitating, directly or indirectly, supplies by persons carrying on business in the United Kingdom of goods or services to persons carrying on business outside the United Kingdom against risks of losses resulting directly or indirectly from war, expropriation, restrictions on remittances and other similar events.

(2) Arrangements under this section will be made and would last at least for three years from the date of coming into force of a scheme made under section 8 of this Act. After such a minimum period, the arrangements will be subject to an annual review.

(3) References in subsection (1) above to a person carrying on business in the United Kingdom and to the insured include any company controlled directly or indirectly by him.'. —[Ms. Quin.]

Brought up, and read the First time.

Ms. Quin: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to take Government amendment No. 16.

Ms. Quin: The issues raised in new clause 2 and in the Government's amendment have emerged as the key concerns of exporters. The Government's approach to political risk reinsurance is the single most powerful reason why so many exporters distrust the Bill and distrust the Government's intentions for the future of the continuing ECGD and for the future of the insurance services group under a private owner.
All hon. Members have been lobbied about political risk reinsurance. They have been lobbied by firms in their own constituencies, by individual firms, by large firms, which may sub-contract to many smaller firms, and by associations of firms, such as the British Exporters Association, the London chamber of commerce and the British Electrotechnical and Allied Manufacturers Association.
I received today a letter from the president of the BEAMA, from which I shall quote. The letter is important and shows vividly the reactions of industry to the Government's approach on political risk reinsurance. In the letter, Sir Robert Davidson says:
Industry has been concerned by the nature of this Bill right from the beginning. There is a real question mark over the willingness and ability of a private sector export insurance endeavour to provide the range and depth of cover after privatisation which exists at the moment through the Insurance Services Group of the Export Credits Guarantee Department. Whilst the Bill was in Committee, Members of

the House raised this point specifically, and tabled an amendment which gave legislative guarantees that the Government would retain an involvement with the insurance or reinsurance of political risk for a period of at least three years after privatisation; this amendment was agreed by the Committee. This seemed the very least that could be done to allay the fears of Britain's exporters.
Yesterday the Government tabled an amendment which, if passed, would simply delete from the Bill the previous statement which guarantees this continued involvement. I find it extraordinary that the Government should choose to send this negative message to industry at a time of severe recession. Some £13 bn of the United Kingdom's £8 bn export business is currently underwritten by ECGD Cardiff, so uncertainty of the kind caused by this action has a potentially disastrous consequence for the confidence of Britain's exporters.
Those are strong statements from BEAMA, and they have been reinforced by many other firms and by many other commercial associations while the Bill was in Committee and in the few days before Report. The Government are winning no friends in industry by their attitude.
I am rather surprised to see so few Conservative Members in the Chamber at present given that it was a Conservative member of the Committee who tabled the original amendment. He received support from some of his colleagues, but unfortunately he did not receive support from the Government. I am surprised that the author of that amendment is not here, as he was a member of the Committee. Perhaps there is a good reason why he is not here to defend his proposal.

Mr. Peter Thurnham: The hon. Lady has commented that few Conservative Members are present. Will she now turn round to see that even fewer Labour Members are present?

Ms. Quin: If the hon. Gentleman looks across the Chamber, he will see that all Labour Members who were members of the Committee are present.

Mr. Doug Henderson: And others.

Ms. Quin: Indeed. However, some of those who seemed most to support the original amendment, which the Government now seek to overturn, are not here to defend their stance in Committee. I know that many Conservative Members were pleased with the original amendment, which was passed in Committee with strong support from the Opposition, so we are rather surprised that so few of them seem to be prepared to defend the amendment, which is under threat from their own Government. All the Conservative Members who are not Ministers to whom I have spoken seem to favour the original amendment because they know that it was popular with exporters and with British industry, and they know the real difficulties that British exporters face at present.
The new clause is slightly stronger than the original amendment. However, to try to promote agreement throughout the House on the issue, it is not as strong as the amendment that we tabled in Committee in which we sought an open-ended Government commitment to provide political risk reinsurance facilities to the new privatised company. The new clause refers to reinsurance being available for three years and for it to be subject to an annual review after that. That goes some way towards meeting the Government's feelings on the issue. Given that the new clause fits in quite well with the original amendment, we hope that the Minister will accept it.
5.15 pm
On reflection, it may be even better to set up a rolling programme. I know that exporters are interested in the idea of a rolling programme to allow reinsurance facilities to continue fairly smoothly. That would also allow reinsurance facilities to be reviewed, rightly and properly, by the Government of the day in the light of the circumstances.
There is a clear difference of opinion between the Minister and almost the whole of British industry about whether it is likely that the private market will be able to take up the reinsurance business. The Government seem to feel that, after the magic period of three years, the private sector will have no difficulty in taking on the whole of the reinsurance facility that is presently provided by the Government. None the less, all exporters have told us that they fear that the private sector will not properly take up the facilities. Exporters are worried that at the end of three years they will be left high and dry. Will the Minister let us know a little about his discussions with exporters on the subject? Will he tell us whether any of them share the Government's optimism about the private market and reinsurance?
What are the Minister's current feelings about the three-year period which is on offer by the Government? Does he expect the amount of reinsurance provided by the Government to reduce systematically over the three years, or does he expect it to remain at current levels and suddenly to be cut off at the end of three years? Many people are worried about that. The Committee accepted the amendment tabled by the hon. Member for Leeds, North-West (Dr. Hampson) and it commanded widespread support. It is disgraceful that the Government are trying to reverse that amendment today.
There seems to be a difference of view between the Department of Trade and Industry and the Treasury on the issue of political risk reinsurance. Will the Minister enlighten us on the discussions between himself and his colleagues in the Treasury? It has been widely reported that there is considerable wrangling between the two Departments over the thorny issue of reinsurance. We want to know what the current state of play is, and whether there is proper agreement between the two Departments or whether disagreements continue to prevail.
Will the Minister tell us how much of a problem the lack of Government commitment to provide reinsurance is in the minds of the bidders for the ISG division of the ECGD? I imagine that all the bidders are anxious about the Government's commitment to provide political risk reinsurance. In Committee, I referred to the difference between the treatment of British exporters and the treatment of Dutch exporters if the Dutch company NCM were the successful bidder and if the British exporters with which it would deal via the privatised ISG did not have the access to reinsurance facilities that Dutch exporters dealing with the same company in Holland would have as a result of the Dutch Government's commitment. The Minister gave an astonishingly complacent reply—that there will always be differences in the export credit facilities offered by different countries. That will not tackle the problem of discrimination.
Are the other bidders concerned about the Government's policy on reinsurance? I understand that they are all concerned that the Government's commitment will be phased out within three years, with no guarantee

thereafter. I should be surprised if they were not worried about the Government's intention to reverse the amendment agreed in Committee.
The Minister may say that there are technical or legal difficulties with the amendment that was passed in Committee—I understand that he said something along those lines to exporters—and if so we need a firm commitment, and preferably something in the Bill, to ensure that exporters know that some political risk reinsurance will be available after the three-year period. It would not be satisfactory if the Minister said, "There are technical difficulties and in any case we will phase out political risk reinsurance after three years."
The Government are optimistic that the private sector will take up the market, but, as far as I am aware, no one else is. The overwhelming majority of exporters who expressed their views to hon. Members highlighted that as their main concern. The Government's attitude is an acid test of their approach not only to exports but to our economic recovery generally.

Mr. Thurnham: I did not serve on the Committee and, although I do not wish to delay the House, I have been asked by a large engineering company in my constituency, Beloit Walmsley, which makes papermaking machinery, to make representations. In addition, a large steel construction company in the constituency of my hon. Friend the Member for Bolton, West (Mr. Sackville), Watson's, has also expressed concerns.
I shall be grateful if my hon. Friend the Minister will comment briefly on political risk reinsurance for four countries—Iran, Russia and China, which are of interest to Beloit Walmsley, and Indonesia, which is of particular interest to Watson's as it is negotiating a large contract there. Beloit Walmsley has received inquiries from Russia and China and an inquiry about an order worth between £175 million and £200 million from Iran. It would be pleased if the Government were to regard that major business opportunity as a unique case, rather than leaving it while a general review of arrangements is undertaken.
The inquiry is from the Karun Pulp and Paper company in Tehran, which is in the Islamic Republic of Iran. Given the developing relationship between Britain and Iran and the difficulties with Iraq and the fleeing Kurds, does my hon. Friend the Minister believe that we will have a more positive relationship with Iran? Adequate insurance for the inquiry would help to cement the relationship between Britain and Iran, to the benefit of both countries and particularly to employment in my constituency.
My constituents have pressed me to say that that case should be regarded as unique and not subject to review so that Beloit Walmsley can further its negotiations with Karun Pulp and Paper with the support of the Government. I should be grateful if my hon. Friend the Minister will comment particularly on the possibility of that contract being treated as a unique case with which the Government can help, and in general on inquiries from Russia, China and Indonesia.

Mr. Cousins: The hon. Member for Bolton, North-West (Mr. Thurnham) went to the heart of the problem. The Government resemble one of the creatures in "The Adventures of Dr. Doolittle"—the Pushmi-pullyu, which tried to look the same at the front and the back and which faced in both directions. The hon. Gentleman gave a good


example of a Pushmi-pullyu at work. The face at the front, led by Ministers, is urging exporters to the Gulf to take on trading and commercial obligations with politically risky countries, but in the calm and comfort of Westminister the same Department is undoing provisions of the Bill that would offer exporters the assurance that they need—that they will be covered for their political risks. It is an extraordinary situation. The Government urge exporters to take on commercial obligations and do business with politically risky countries, but undermine the new clause and, by their amendment, negate the amendment that was moved in Committee by the coalition forces.
The Minister must consider his position. We can all bandy around the fact that in Committee and in this debate Labour Members have quoted the CBI to support their case, but the point is serious: the CBI's mind is made up and it regards the amendment that was passed in Committee as essential. It regards the guarantees that were given to exporters to politically risky countries as fundamental to the conduct of sound business and the expansion of British exports. The statement that it issued made it perfectly clear that it believes that the honour and integrity of Ministers' comments are on the line. It reminded its members—this point was made many times by members of the Committee—of the assurances that were given by the then Secretary of State when he announced the privatisation of the Export Credits Guarantee Department in December 1989. He was clear that political risk reinsurance would be guaranteed for three years. That direct and explicit undertaking was given to the House and to the commercial world. The Government amendment undoes the worth and value of that. By so doing, it signals a lack of commitment to underpin commercial exports to politically risky countries, which will do considerable damage to the honour and reputation of the Government and to British business men and women in their work in other countries.
What will other countries make of this debate? What will they make of the assurances of a Government who try to undo the value of an undertaking that was given by a previous Secretary of State in December 1989?
The hon. Member for Leeds, North-West (Dr. Hampson) successfully moved the amendment in Committee that the Government are now seeking to undo. He said that he hoped his hon. Friend the Minister would accept the amendment because it would constitute, to use his ringing phrase,
the Sainsbury guarantee".
It is clear this afternoon that neither the Ridley guarantee given in December 1989 nor the Sainsbury guarantee, to which the hon. Member for Leeds, North-West drew attention when he moved his amendment, has been honoured. That is shameful and bad. It will go against the interests of British exporters at a time when they badly need Government assistance in seizing the opportunities that they now have in many politically risky situations round the world.

Mr. Sainsbury: I start by sending a positive message to British exporters and emphasising the importance that the Government attach to promoting British exports and providing support to British exporters.
As I hope that the hon. Member for Gateshead, East (Ms. Quin) recognises, it is necessary not just to say that we want to provide support, but to provide it sensibly,

practically and realistically. It is insufficient to say that words in a Bill are adequate because the intention behind them is good. Her new clause 2 would not help exporters although I realise that that is her intention. We must recognise that her proposal would have statutory force. Similarly, clause 4(2), which amendment No. 16 would delete, would not be as helpful as my hon. Friend the Member for Leeds, North-West (Dr. Hampson) intended.
The new clause and amendment deal with a complex aspect of export credit insurance. That may explain some of the misunderstandings about the national interest reinsurance facility that have arisen, and that, it is clear from our debate, regrettably still exist.
It is important that the House should recognise that these complex arrangements deal with the insurance and reinsurance arrangements for less than one half of 1 per cent. of Britain's non-oil visible exports. As of now, only the insurance and reinsurance arrangements for less than that tiny percentage would be the subject of what we seek to define as political risk reinsurance.
It may be helpful if I put the insurance arrangements for this small fraction of our exports in the context of the overall level of Government support for exporting. The promotion of British exports and the provision of support to exporters is an important part of the work of my Department. We are committed not just to maintaining that work but to constantly seeking ways to improve the service that we and other parts of Government provide to exporters.
Most recently, on 14 March I announced the merging of the export divisions of the Department of Trade and Industry and of the Foreign and Commonwealth Office to form a new joint directorate, which will be responsible for the development of export promotion policy. It will improve the coherent and consistent delivery of export services. Exporters will now find that, whether they are seeking help from the regional office of the DTI or from a post overseas, the export promotion arms of both Departments will be operating under the name of Overseas Trade Services.
Overseas Trade Services will deploy more than 2,000 staff worldwide, all of whom will be committed to providing a wide range of advice, information and assistance to British firms seeking business overseas. Their help will extend to every stage of the exporting process —for example, in finding an export representative, in attending promotions and fairs overseas, in going on overseas missions, in providing export intelligence services about export opportunities, and in export marketing research schemes to look at the opportunities for a particular market for a particular product. A whole range of services will be available from the Overseas Trade Services arms of the DTI and FCO to help exporters.
The efforts of the DTI and FCO staff are supported by many others, most notably my right hon. Friend the Prime Minister. Like all other Ministers, he takes every opportunity to speak up for British goods and services and to promote British exports.
At overseas posts it is not just the staff who are committed full time to working for Overseas Trade Services—the commercial staff—who are involved in helping exporters. Throughout the world in all our overseas posts the head of the mission regards it as an important part of his task to look for opportunities to help British exporters, as do all his staff. In Britain, in addition to those whose full-time job is working in Overseas Trade


Services, all the staff of the regional offices of the DTI regard helping exporters as part of their overall responsibility.
In addition, several other Departments, for example, the Ministry of Agriculture, Fisheries and Food, the Department of the Environment, the Department of Employment, the Department of Transport, the Department of Energy and the Ministry of Defence, through its Defence Export Services Organisation, provide help to the industries with which they are involved. In addition, my right hon. Friend the Secretary of State for Trade and Industry and I receive valuable advice from the British Overseas Trade Board and its network of area advisory groups, which bring in expert advice on export opportunities from no fewer than 180 senior business men with a great deal of experience.
The support available to exporters through the ECGD's project group, which will remain in the public sector, is substantial.

Mr. Barry Porter: I have been listening with great interest to everything that the Government and the Departments do to assist exporters and I congratulate them, but I am puzzled. If the political risk reinsurance is so insignificant as a percentage of our visible exports, why are the Confederation of British Industry and individual firms, as well as everybody who has written to me, kicking up such a fuss?

Mr. Sainsbury: My hon. Friend raises a good point. Despite all the assistance, there is a great deal of misunderstanding. The remarks of the hon. Members for Gateshead, East and for Newcastle upon Tyne, Central (Mr. Cousins), who has drifted from where he was a moment ago but who is still in the House, show that that confusion still exists. I am sure that my hon. Friend accepts that the manpower, time and resources committed to helping exporters are considerable. We are committed to continuing to provide that support as effectively as we possibly can.

Mr. Alun Michael: The hon. Member for Wirral, South (Mr. Porter) asked the Minister to explain why everybody except the Minister regards this approach as sensible and why only the Minister is convinced of the rightness of his course of action. Given the intense debate in Committee and the press criticism of his action, has the Minister sat down and examined in his own mind whether he might be wrong?

Mr. Sainsbury: I am sorry that the hon. Gentleman is joining the gang of the confused, alongside the hon. Members for Gateshead, East and for Newcastle upon Tyne, Central. It was only too evident, during the discussion in Committee and in correspondence that I have had with several people since, that misunderstanding remains about the reinsurance arrangements that the Government intend to provide for the new company after privatisation. Therefore, it is not only helpful but vital that I describe them in more detail. I again emphasise that we are talking about political risk reinsurance—the reinsur-ance arrangements for less than one half of 1 per cent. of the non-oil visible exports from the United Kingdom.

Sir Robert McCrindle: Before my hon. Friend explains the rationale of his case in a little

more detail to those of us who fully confess to be mildly bewildered, perhaps he could explain one thing. If we are dealing with such a small percentage of British exports, does my hon. Friend accept that by seeking to nullify the effects of the amendment successfully moved by my hon. Friend the Member for Leeds, North-West (Dr. Hampson) he risks sending the wrong message to the great majority of exporters? The amendment offered a relatively small concession and I believe that any attempt to nullify its effects would waste a great deal of the Government's valued reputation as an assistant of exporters without any great advantage.

Mr. Sainsbury: The last person in the House to be confused on matters of insurance is my hon. Friend, as he is an acknowledged expert on the subject.
I want to send a positive message to exporters, even those concerned with that small fraction of overall British exports. I want that message to be helpful, but if the Government accepted the new clause or the well-intentioned amendment tabled by my hon. Friend the Member for Leeds, North-West that would not be helpful and would not achieve the purpose that that amendment was designed to meet. As I develop my argument I hope that my hon. Friend the Member for Brentwood and Ongar (Sir R. McCrindle) will see that I am seeking to give reassurance in the most effective way.

Mr. Peter Bottomley: The proportion of exports is not insignificant. We are not particularly concerned with those transnational companies that switch goods between Britain, France, Germany and Spain because that trade does not carry much political risk. I doubt whether we are that concerned about the import and export of gold and diamonds, as people can arrange to be paid without much delay. My guess is that our biggest concern is for those in the manufacturing industries, including engineering, when there may be some time between the dispatch of a consignment and receipt of payment. I suspect that the reassurance that the Minister will seek to give will be addressed to that group rather than to those who are not subject to a serious risk.

Mr. Sainsbury: I believe that I shall give a positive reassurance on the issue to which my hon. Friend has drawn attention.
The longer-term exporters are the exporters whose exports are covered by the project group of the ECGD. That part of the ECGD will continue as a Government Department and therefore there is no requirement for the political risk reinsurance, which is the subject of the new clause and the Government's amendment. The new clause and my amendment are addressed to the political risk reinsurance that will be provided for the Insurance Services Group, which covers short-term—up to 180 days —exports. They will be covered by the privatised organisation that will take over the work now done by the Insurance Services Group.
After privatisation, the Insurance Services Group will be able to provide a more flexible and comprehensive service to its customers. It will enjoy the freedoms, but also be subject to the competitive pressures, that are the features of business in the private sector. The Government, through the continuing ECGD—I emphasise that it will continue to provide export credit insurance to long-term project exporters—will also provide to the new company that will take over the business of the Insurance Services


Group of the existing ECGD two different types of reinsurance to support and assist it in its transition into the private sector.
The two different types of reinsurance have caused confusion and still seem to be causing confusion among Opposition Members.
The first type of reinsurance will be ECGD provision of support to supplement the reinsurance that the new company will be securing in the private reinsurance market. It will cover both commercial and political risks. That temporary facility will be available for up to three years after privatisation. That type of reinsurance is not only normal but essential for an insurance company, which has to avoid the need for an unnecessarily large market capitalisation. I am sure that my hon. Friend the Member for Brentwood and Ongar is well aware of that.
In the run-up to the issue of the invitation to tender for the shortlist of likely bidders for the insurance services business, the Government's major priority has been to develop, with the private reinsurance market, a package of reinsurance support to be available to the privatised company immediately it begins operations. I am glad to say that the market has responded extremely positively to the new company's needs and I am confident that the vast bulk of the new company's reinsurance needs can he met by the private market immediately upon privatisation.
The placing in the private market of the Insurance Services Group's portfolio of risks is probably a unique event in the market's experience. We are talking of the risks attaching to more than £13 billion of United Kingdom exports annually. By any measure, that is an enormous amount and it is a credit to the skill and flexibility of the market and to ECGD and its advisers that the capacity has been found to meet virtually the whole of that requirement. However, there could be a small shortfall and the Government intend to fill that through the continuing ECGD becoming, in effect, one of the reinsurers of the new ISG.
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I must make it clear that it is that "top-up" support that is transitional. It will be available to the company for up to three years after privatisation. Given the expected successful placing of the vast bulk of the company's requirements in the market even before it starts its operations, I am sure that the House will understand why the Government are confident that, once the market has familiarised itself with the new company and its management, it will be able to meet the company's full needs for quota and excess of loss reinsurance within those three years.
The confusion between the second type of reinsurance and the first type that I have just described has given rise to some of the unnecessary worries that have been expressed. The second type of reinsurance is the "national interest" facility that I announced on Second Reading. The need for that arises because there are a few countries in which ECGD facilities are at present available, but where the management of ISG considered that to have offered the risks on those countries to the reinsurance market now could have prejudiced the market's response to the total book for business put to it. By definition, those are countries where the company and private market reinsurers are not at present happy with what they see as the political and commercial risks. Therefore, to avoid any sudden and sharp reduction in the facilities available to

our exporters in the immediate aftermath of privatisation, the Government will provide support to enable some cover to be given on exports to those markets.
In order not to prejudice wider diplomatic and commercial sensitivities, I shall not specify precisely the markets concerned. My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) mentioned four markets—Iran, China, the USSR and Indonesia. It is likely that the possible business to which my hon. Friend referred would be project business—longer-term export business—in those markets. Cover is already available for Indonesia and China, but cover for the longer-term markets in the USSR and Iran is at present under review. I assure my hon. Friend that I shall ask ECGD to look urgently at the Beloit Walmsley case in Iran to which he referred. Meanwhile, the companies concerned might like to contact their regional office or ECGD contact.
The countries that are regarded as requiring political risk reinsurance are few. Press speculation about the identity of those markets has been wide of the mark. The proportion of ISG business at present involving exports to those markets—not the proportion of total British exports—is still less than 2 per cent. of the total business insured in 1990–91. That is still a worthwhile amount of exports—about £300 million worth—but it is a small proportion of the total insurance book of ECGD and a fractional proportion of the total non-oil visible exports from Britain. Nevertheless, it still represents a valuable proportion of our exports. So although this is not a major facility, it is one of importance to some exporters.
The intention is that this national interest cover should be delivered through the continuing ECGD giving 100 per cent. reinsurance to the privatised company. It could well be—I hope that it will be—that most of these national interest markets will become reinsurable in the private market so that the need for this facility will fall away. The likelihood of this is, though, rather less clear than it is for the top-up arrangements for the company's more general reinsurance requirement.
It may help, at this point, if I say a little about the nature of the reinsurance market for credit insurance risks. This will, I hope, help to clarify the developing relationship between private reinsurers and the Government and explain some of the uncertainties. A key point is that this is a complex market and this complexity is compounded by the fact that it is a rapidly changing market.
The ECGD has, therefore, quite properly used the services of a specialist broker. The placing of Insurance Services' more than £13 billion of risk has obviously been a challenging task. There have been some suggestions from some quarters that it would simply not be possible to place Insurance Services requirement in the market because of the amount and degree of political risk inherent in the portfolio. Despite statements which I have made to the House and in Committee, some doubts still seem to exist; indeed, they were echoed in some of this morning's newspapers.
There are two important points to be made about the relationship between ECGD's Insurance Services and the reinsurance market. First, three quarters of Insurance Services' business is with the OECD markets; secondly, the ECGD is negotiating a package deal. Thus, for reinsurance purposes, non-OECD business is being packaged with the bulk of OECD business.
I have already explained that these negotiations are meeting with considerable success. The market has already


indicated its readiness to accept the vast bulk of the new company's reinsurance arrangements. The balance will be supplied by ECGD joining the reinsurance group under the transitional top-up arrangement, while a small balance —just 2 per cent. of the total—will be dealt with under the quite separate national interest reinsurance facility.
But that is today's picture. Every element in it is subject to change. It is necessary to understand that the reinsurance market is international; indeed, many non-United Kingdom players occupy a central place in it. The market already provides reinsurance to some of ECGD's counterparts in both the public and private sectors. However, meeting the reinsurance requirement for the Insurance Services Group will represent a step-change for the market but such rapid development is, as we all know from the changes which this Government have fostered through deregulating the financial markets in London, becoming a more common fact of life. Further changes will arise in future. The capacity and experience of the private reinsurance market is clearly expanding. The performance of Insurance Services as a new company will demonstrate its competence to the market. The economies of the importing countries and the political risks that the market perceives in them will change over time, as will the needs of British exporters.

Ms. Quin: The Minister has said that the situation is changing and will continue to change. Given the difficulty with predicting exactly what will happen, and when, why have the Government fixed on this period of three years by when the facility to which the Government has alluded will be phased out? Why should the Government stick to this magical figure?

Mr. Sainsbury: I am sorry that the hon. Lady is still confusing the two types of reinsurance. The three years refer to the top-up or quota reinsurance being provided by the ECGD joining the market, covering more than 90 per cent. of the total portfolio of Insurance Services Group. What we are examining now and separately—this goes for the new clause as well—is the balance, the 2 per cent. of Insurance Services group's portfolio which is not being offered to the market because of the perception of the political risk inherent in the countries involved.
This has been a trail-blazing operation which reflects great credit on the skill and flexibility of ECGD and its advisers. In recent years there have also been changes in the make-up and direction of our exports and in the economies of many importing countries. All these factors bear crucially on the nature of the facilities which exporters will require from ECGD in the future. No one can predict with any certainty what the next changes will be, when they will occur and how they will alter credit insurance needs.
The new subsection, which amendment No. 16 seeks to remove, could have the unfortunate effect of requiring the Secretary of State for a period of at least three years—the subsection mentions these three years as well as the other three relating to the quota top-up reinsurance—to provide political risk cover, short, medium or long-term, in respect of any proposition put to him—irrespective of its merits or the degree of risk involved. I am sure that the House will recognise that such an obligation would be extremely unreasonable. Neither the project group nor Insurance Services has ever had such a statutory obligation to provide cover regardless of risk. It would oblige the

Secretary of State to insure the sort of risks which were rather accurately described as long ago as 1949 by the then President of the Board of Trade, now Lord Wilson of Rievaulx, as unduly
hazardous or quite crazy".
The subsection would expose the ECGD to a degree of financial risk that could not be in the interest of exporters.
So, although I sympathise with the intentions of my hon. Friend the Member for Leeds, North-West— intentions which led him to propose his amendment—I do not believe it possible to find appropriate words which would fulfil them to include in what will become an Act. On the one hand, there is the rigidity of requiring the Secretary of State to cover any risk regardless of the destination or of the nature of the exports involved, which might even be arms. On the other, it is impossible to specify the detail of the arrangements, referred to in the new clause and in the new subsection, which the Secretary of State would be required to arrive at. For instance, would they be arrangements at a stated premium, or with or without a letter of credit, or with a confirmed letter of credit? We cannot specify in the Bill what they would be.
I do appreciate, however, that some exporters, together with the CBI and the hon. Member for Gateshead, East, are worried. I can assure hon. Members that the national interest facility for the second type of reinsurance that we have been discussing will be kept available after privatisation, and we shall keep the requirement for the facility under review. It would be the intention that, subject to its performing satisfactorily as an ECGD trading facility, it would continue for as long as the Government considered it essential to meet the reasonable needs of exporters.
So we are faced with three reasons why the new clause and the subsection which I am seeking to remove would not help exporters in the manner in which they were intended to. First, it is not possible to define with the accuracy appropriate and necessary for inclusion in an Act what the arrangements should be. Secondly, even were it possible to come up with a satisfactory definition, all the wording that has been suggested would require the Secretary of State through ECGD to provide reinsurance for any such risk regardless of how bad a risk it was. I hope the House will recognise that it is unacceptable to remove entirely the exercise of discretion in these matters.
Thirdly, in view of developments in the reinsurance market and the changing political and economic situations which lead to the need at any time for a country to be considered a particularly bad risk for the reinsurance market, it seems inappropriate to include a time limit. That is because Government-backed reinsurance may not be needed for that period and any time limit implies an arbitrary cut off point. That is far less appropriate than saying, as I have said, that the matter will be kept under review. I urge the House to reject the new clause and, on the basis of my assurances, to accept amendment No. 16.

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Mr. John McAllion: I have listened carefully to the Minister's arguments, which seem to fall into three broad categories. First, he tried to argue that the Opposition do not have the judgment to understand the complexities of export credit insurance dealt with by the new clause and by clause 4(2). He said that they covered such a tiny percentage of British exporters that it did not


matter whether the new clause was accepted or clause 4(2) was deleted. He ran into some hostile flak from his own side when he tried to put that argument.

Mr. Rhodri Morgan (Cardiff, West): He encountered hostile fire.

Mr. McAllion: He did, and it caught him.
Even if a small percentage of our exporters were affected, that still accounts for a large number of British companies. Those companies depend on exports for profits and their workers' jobs depend on such exports.
I was confused by the Minister's final argument against the new clause and the amendment which was carried in Committee. He said that it would be impossible to find appropriate words adequately to cover the matters that we should like to see in legislation. That is a strange notion, because if they were given the proper instructions civil servants could come up with words that would give effect to the arguments that we seek to substantiate.
The Minister said that the amendment carried in Committee would have obliged the Government to give cover for any risk regardless of the financial consequences to the Treasury. Such detail can easily be dealt with by skilled civil servants. They could find phrases that would not allow the Government to be pinned in that corner and at the same time would provide the cover that many exporters seek from the Bill.
The Minister ducked the major argument advanced by my hon. Friend the Member for Gateshead, East (Ms. Quin) and by some of his own hon. Friends. That argument dealt with the range and depth of cover of political risk reinsurance that is provided in the Bill. Despite the Minster's reassurances, as he called them, he is sending out to British exporters the negative message that the Government are not prepared to back them in the way that other European Governments back companies that compete with ours. That is unfortunate.
I was impressed by some Conservative interventions because the hon. Member for Leeds, North-West (Dr. Hampson), whose amendment was accepted in Committee, found it convenient not to be here for the debate on that amendment during which we heard that the Government intend to delete it from the Bill. It will seem strange to those outside who take an interest in our proceedings that some hon. Members have the courage of their convicitions in Committee where they take brave stands in defiance of the Whips and their party leadership but that their courage fails them on Report. It will be interesting to see how those hon. Members vote on the new clause.

Mr. Peter Bottomley: During the term of the last Labour Government—and there is not much prospect of having another one very soon—members of the Tribune group used to calculate how many of them could vote against the Government while still making sure that the Government won.

Mr. McAllion: That is one the serious reasons why I did not renew my membership of the Tribune group, which I joined when I first came to the House. I am in favour of standing up for the things in which I believe in whatever way I find possible.
We are dealing with areas that are generally described as less secure export markets. There has been much academic discussion about the ins and outs of whether a

Bill can technically express that concept, but no one has come to terms with substantive examples. Let us look at Iraq which, by any standard, must be considered a less secure export market. The Minister seems unsettled.

Mr. Sainsbury: I remind the hon. Gentleman that the United Nations embargo on exports to Iraq is still in force.

Mr. McAllion: It is in force at the moment, but I should like to examine what has happened over the past 10 years in Iraq. The Minister will remember that over that time that country experienced the horrors of the Iran-Iraq war. In 1988, the Kurdish rebellion was suppressed by resort to chemical weapons by Saddam Hussein who then invaded Kuwait and suffered the consequences of the Gulf war. He is now being subjected to further Kurdish rebellions in Kurdish and southern Iraq, and we all know about the tragedies in the mountainous areas bordering Iran and Turkey.
Throughout that tumultuous period Ministers continued to foster British trade with Saddam Hussein's regime. A succession of Secretaries of State for Trade and Industry traipsed through Baghdad in search of contracts for United Kingdom exporters, and in 1988 that culminated in the announcement of £340 million worth of export credits for trade with Iraq. It is not the purpose of the debate to question the morality of such behaviour by Ministers and the ECGD. However, it is relevant to note that Ministers and a Government-owned agency were underwriting British business in a very unsecure export market. Only the Government were prepared to take the kind of risks which we now know were involved in trade with Iraq.
Since Ministers and a Government Department issued export credits to underwrite trade with Iraq, that country has suffered at the hands of the west perhaps the heaviest air bombardment ever inflicted on a modern state. It has been invaded and occupied by foreign troops, its cities and infrastructure have been devastated and its very survival is threatened by the famine and disease which have followed the war. The prospects for its economic recovery have been blighted by United Nations demands for reparations to Kuwait. Iraq is now engulfed in a bloody and dreadful civil war, the consequences of which we do not yet fully understand.
The notion that private sector insurance would be prepared to underwrite business with a country such as Iraq is unbelievable. The Minister said that there is no problem, even with short-term insurance cover provided by the ISG being provided by the private sector in the long term, but that is not facing reality. Iraq may not be typical of the markets that we are debating in terms of the scale of the horrors to which Iraq has been subjected in the past 10 years, but it is typical of the nature of the risks in such markets.
Political instability is found in many parts of the world, and the Government will have to come to terms with that if British exporters are to be assisted in trading with politically unstable countries. It is disingenuous of the Government to say that nothing can be written into the Bill so that the Government cannot be tied down to a prerequisite of the sort of cover that will have to be offered. We are told to leave it to the Government's judgment and that for politically high-risk markets cover will continue to be funded by the Government through the newly privatised ISG and that it will be 100 per cent. for an


undefined period. When we asked the Minister to list the countries and the markets for which the Government will give a commitment he dried up. It seems that it is not possible to tell the House or British exporters the markets for which the Government will provide 100 per cent. cover.
Nor is the Minister prepared to say how long the Government will provide such cover. It will be provided until the Government decide that it can no longer be provided. The fact that the Minister will not make a commitment is unsatisfactory to hon. Members and to British exporters.
Four markets were specified but the Minister's commitment was vague. He recommended to one hon. Member that he should tell the companies in his constituency to raise the matter with ECGD and write to the Minister concerned because he was not prepared to make the commitment that Ministers should make in dealing with such an important subject.
Elsewhere in Europe, competitors of British exporters receive reinsurance back-up from their Governments that is denied to British exporters. The Government are determined not to make the same commitment to British exporters as is made elsewhere in Europe. The Minister must come to terms with the fact that the world is becoming more unstable. More markets are becoming subject to political unrest and instability and we do not know what the future may hold for some countries. If markets are uncertain, returns from investment in those markets are even more uncertain. British exporters need to know that their Government will support them if the worst comes to the worst and their contracts fall through. They need to know that if the Government of the country concerned refuse to honour the contracts in which they have invested, the Government will be prepared to back them up fully.
So far in this debate, the Minister has made it clear that the Government are not prepared to give that support to British exporters because of the costs involved. It seems therefore that they are prepared to place British exporters at a disadvantage to others in Europe. That is unsatisfactory and disgraceful.

Mr. Michael Grylls: As a member of the Standing Committee, I put my name to the amendment before the new clause was added to the Bill. Alas, when it was debated I was unable to be in the Committee. Had I been there, I would have voted for it, but as it happened, the amendment was passed anyway. My hon. Friend the Member for Leeds, North-West (Dr. Hampson) did the House a service in moving the amendment. It has driven the Government to look at the clause anew, even if the new clause is flawed. We know that it is not perfect but most Back-Bench amendments are not perfectly drafted because we have fewer resources than the Government.
Many exporters and organisations have written to hon. Members. The hon. Member for Gateshead, East (Ms. Quin) quoted extracts from correspondence showing the concern about the apparent gap in cover. When those concerned read the Official Report of the debate and my hon. Friend the Minister's speech, they will be "greatly reassured", to coin the Minister's expression.
I am not one to stand up in the House against a privatisation. The experience of most of us during the past

12 years has been that various industries and businesses previously run and owned by the Government are much better in the private sector. I believe that the transfer of this industry into the private sector will be beneficial. It is proving to be a special animal because it is privatisation with a couple of "buts"—it has a couple of legs of support from the Government, albeit temporarily, because of the special difficulties of reinsuring political risk. My hon. Friend the Minister's description of those legs should reassure exporters.
Although the Opposition may poke fun at the way in which the amendment was made by Conservative Back Benchers against the wish of a Minister—that is part of the political fun—the Committee stage involves the serious business of trying to improve a Bill. Conservative Back Benchers have as much right to try to improve a Bill as any other Committee member, and it is perfectly reasonable for us to do so. However, the two legs that have appeared for support from ECGD to supplement commercial and political risks for up to three years—reinsurance being leg no. 1, and leg no. 2 being the national interest facility of further support for reinsurance by the Government—are a strong arrow in my hon. Friend the Minister's quiver in defending the clause and seeking, more importantly, to assure exporters that their position will be taken care of. Although we may have had a bit of fun over the amendment, there is a consensus on both sides of the House that exporters must be given maximum support.
The Small Business Bureau, in which I have an interest, has stood up for small and medium-sized firms over the years. Larger firms do not need much help, but smaller and, more relevantly, medium-sized exporters are important. My hon. Friend the Member for Eltham (Mr. Bottomley) mentioned engineering firms, but many of those will be covered by long-term finance with ECGD and will be fully covered by that part of the service which is still run by the Government. Thousands of those exporters—small engineering firms—follow contracts given to large exporters such as GEC and bring thousands of minnows in their wake, and it is important that they be looked after.

Sir Robert McCrindle: Like my hon. Friend, I am mainly concerned about the needs of small to medium-sized exporters and believe that the large ones can look after themselves. Like him, I think that they will be reassured by my hon. Friend the Minister's comments. Does he agree that, unfortunately, towards the end of my hon. Friend the Minister's speech, he said that, because it was impossible to find an appropriate form of words, he could not take on board the point made by my hon. Friend the Member for Leeds, North-West (Dr. Hampson)? Can my hon. Friend the Member for Surrey, North-West (Mr. Grylls), who has been in the House for the same time as I have, recall any occasion when a Minister has said that it was not possible to give a reassurance that he wished to give because his civil servants had been unable to evolve an appropriate form of wording? Would not it be better for my hon. Friend the Minister to try again, perhaps in another place?

Mr. Grylls: My hon. Friend and I may have been in the House for the same length of time, but my memory is becoming worse and worse. I am sure that what he recalled must have happened on many occasions. Those words


have been spoken in the House and, as the Americans say, they are on the record and should be taken seriously. The two legs exist to back up what my hon. Friend the Minister said. He did not simply give a vague assurance that everything will be all right on the day, but offered the addition of those two top-up legs.
I welcome the Minister's comments about general help to exporters and the bringing together of services under one arm. That is important one-stop shopping for medium and smaller firms, particularly outside London, so that they know where to go for services and to encourage them when they are seeking markets, agents and market research. I welcome that change, as it will provide flexibility for exporters.
I welcome the privatisation, because of the ability of the private insurance sector to offer the cover that firms need when they trade under different circumstances throughout the world, and I believe that the British insurance market will respond to it. Perhaps they will not respond totally from day one. My hon. Friend the Member for Brentwood and Ongar (Sir R. McCrindle) will know more about that than I do. It will take time for the insurance market, particularly the reinsurance market, to understand its market and know what it must develop to respond to the needs of all our exporters. That cannot be done immediately—the privatisation has not yet taken effect.
I am prepared to give the Government the benefit of the doubt, with the assurance that the two supporting legs have been offered and the market will develop and be able to provide in a much more flexible and general way than any Government service can do. It is difficult to be sure and know that, in a foolproof, belt and braces way, we have the system totally right. Having listened to the Minister's speech, my judgment, for what it is worth, is that the House would be wise to give him and the Government the benefit of the doubt, and accept that they have tried to meet the real worries rightly expressed in Committee. The House should believe that the proposals will fulfil the needs of most of our exporters. Some 0·5 per cent. of our exporters may not be satisfied, but certainly the generality of them will, in the long run, be better off through the transference to the private sector.

Mr. Morgan: Since the hon. Member for Surrey, North-West (Mr. Grylls) rose to speak, the hon. Member for Leeds, North-West (Dr. Hampson) has arrived in the Chamber. It was like the United States fifth cavalry arriving at the last minute to defend to the death the amendment that he successfully steered through Committee with the support of the Opposition. We noticed a sort of legislative eternal triangle between the Minister, the Parliamentary Private Secretary and the successful rebel Back Bencher going into action straightaway. The hon. Member may have been successfully anaesthetised by a dart between the shoulders in the meantime. Perhaps before this debate ends he will say what his intentions are.
Before the hon. Member for Leeds, North-West, and possibly you, Mr. Deputy Speaker, arrived in the Chamber, the Minister said that he sympathised with the aims of the successful amendment tabled in an act of rebellion in Committee and supported by Labour Members. The hon. Member for Brentwood and Ongar (Sir R. McCrindle) also referred to that fact. It seems odd, therefore, that the Minister voted against the amendment in Committee but now, at least, agrees with its purpose.
The Minister said that there was an unfortunate lack of words in the English language with which to express the intentions of the Opposition, the hon. Member for Leeds, North-West and his colleagues, some of whom are ranged here—and that was despite the vast resources of the Department of Trade and Industry. Personally—and I am probably speaking for 90 per cent. of hon. Members—I believe that when a Minister makes such a statement, he is not to be believed. The lack which he says means that intention cannot be transferred into legislative reality is a lack that exists in the Minister's mind, not in Chambers dictionary.
Will the Minister try replacing the word "shall" with the word "may" in line 1 of the amendment of the hon. Member for Leeds, North-West? He suggests that the amendment, which is contained in the Bill and would be wiped out by Government amendment No. 16, would cause problems because it would imply that, without any payment of premium, everyone would have a right of access to full political risk insurance against every form of earthquake in an earthquake zone, revolution in a revolution zone, and failure to remit in a country with foreign exchange difficulties. That is nonsense because no one is suggesting a premium-free service—it would obviously contain appropriate premiums. The Minister's suggestion that the amendment of the hon. Member for Leeds, North-West implied the ultimate exporter's free lunch, with a premium-free form of insurance or reinsurance, is the ultimate in weasel words.
We all listened carefully to the Minister's brief, which was evidently carefully prepared for him and from which he did not depart except when hon. Members made interventions, for the obvious reason that he must convey the message clearly. It was a damage limitation exercise, attempting to give some reassurance to exporters. He will be aware that, in spite of his efforts, the overwhelming impression given and the message that has got through to a typical, middle-sized, common or garden, British backbone exporter is that the No Turning Back group has hijacked the Department of Trade and Industry—not in the person of the Minister, but in the persons of the previous and present Secretaries of State—and has decided that what British industry needs, whether when exporting or manufacturing goods for use in this country, is another dose of the great cold shower of 1979–81. The group believes that if 20 per cent. of companies go out of business, as they did between 1979 and 1981, it will probably be a good thing because they were not efficient, otherwise they would have survived. It believes that a bit more of the cold shower in relation to export assistance in the form of insurance and reinsurance will be healthy because it will take out the softies who cannot live within the No Turning Back group's concept of a true free market world.
That is the message that exporters have received, why they have been writing to hon. Members and why the Government have attempted to produce the sort of retrospective reinsurance to meet some of the aims of the amendment successfully tabled by the hon. Member for Leeds, North-West. That is why we, on behalf of exporters in this country, still maintain that the proper way for the Government to act would be to retain political reinsurance as a generalised, but not premium-free, right for common-or-garden exporters, whether involved on the


project side or in short-term insurance requirements, until we see what other countries are also disarming themselves of the right to provide political insurance.
This country needs more exporters. Not all markets are stable—those in eastern Europe are rapidly changing their characters. The Minister said that the very fact of change is an argument against generalised political risk reinsurance. We say that it is a strong reason for providing it because otherwise British exporters will continue in their sad pattern—compared to Japanese or German exporters —of being exporters to small, back-street operations instead of high street ones. In order to get into the high streets, a company must have confidence when the market opens up, otherwise it will be the seventh or eighth exporter in the list, export only at boom times and never really become established.
From where we stand, Britain stands and Britain's balance of payments deficit stands, the idea that this country can do without political risk reinsurance during the next five or six years unless all other countries in the world give it up in legislation to be passed tomorrow or within the next five years is absolute nonsense. It would be a complete dereliction of duty by the House were it even to consider doing that—in spite of the Minister's weasel words.

Dr. Keith Hampson: I apologise to the Chair, the House and my hon. Friend the Minister for arriving late. I expected that the Opposition Benches would be crammed with keen and eager Members who would pursue new clause 1 excessively, as they did in Committee. I thought that I might just about be in time for the start of the debate on new clause 2.
In Committee, I offered my hon. Friend the Minister the opportunity of accepting the amendment and thought that I might go down in fame and glory as being the originator of the Sainsbury amendment. Unfortunately, I gather from an excellent, quick briefing from my hon. Friend the Member for Kensington (Mr. Fishburn) that the Minister gave some firm assurances and expressed sympathy with the aims that we were seeking to pursue. The hon. Member for Cardiff, West (Mr. Morgan) put his finger on the crucial point—although many of the other European countries with which we compete are moving towards privatising the short-term business, they all automatically assume that the political risk markets will be supported by their Governments. It seems essential that, as long as that belief prevails among our competitors, the British Government must support British industry and not place our companies at a disadvantage.
I entered the Chamber in time to hear some of the remarks of my hon. Friend the Member for Surrey, North-West (Mr. Grylls), who knows so much about small and medium businesses. It seems that a particular sector of concern is those niche players with special products—the smaller companies going into difficult markets. Indeed, they are pathfinders in those markets in terms of other contracts that may ensue. As the amendment which was accepted in Committee was geared to sending a signal to British industry that the Government were behind it, there is a genuine belief within British business that the Government will maintain the reinsurance facility, although it will be under review. That is reasonable

provided that the Government can guarantee that the facility will continue for as long as it is needed and not only as long as the Treasury feels that it can afford it.
6.30 pm
Perhaps the Treasury is at the heart of the problem. Perhaps that is why we are being approached by industry. The Treasury produced various memoranda that subsequently appeared in the public arena, and evidence was provided for the Select Committee on Trade and Industry. The attitude or mentality of the Treasury was entirely clear. I am not speaking of the Treasury now because this has been a long-standing Treasury view. British industry has always been somewhat jaundiced—I think rightly—about the rather dead hand of the Treasury in industrial matters. It tends to adopt a narrow, blinkered and short-term approach that is concentrated on the bottom line.
For some years the Treasury has been saying that the reinsurance business and export credit insurance are costly exercises because a good deal of money is being lost. Although the political risk market in short-term business is a tiny part of the sector, British industry has still felt that the Treasury would like to pull out from it.
I do not know what some would-be buyers have said to my hon. Friend the Minister. I read the newspapers, however, and as my right hon. and hon. Friends will know, the general flavour of press reports over the weekend was that at least some potential buyers are looking rather more uncertainly at purchases if there is not the guarantee of reinsurance in political risk areas. I have been told that the reinsurance industry does not believe that within three years it will be able to pick up all the pieces.
It is right to have an ongoing review because some political risk areas may become better risks than others which seemed at one stage to be quite good but which deteriorated. That is all right provided that there is a firm guarantee. That is all that I was seeking to provide for in introducing the amendment which was carried in Committee by my hon. Friends, with the help of Opposition Members.
I am nine-tenths reassured by the remarks of my hon. Friend the Minister and so I shall not grieve if the terms of my amendment are removed from the Bill. I merely ask my hon. Friend to pause for one moment. It is to be assumed that the Government will carry the new clause and so remove the terms of my amendment, and as I am not a lawyer I must bow to the legal opinion that is offered to the Government. It may be, however, that the Bill will embrace many countries in which the political climate is such that we would never wish to engage in reinsurance facilities. If it is stated that the Secretary of State shall make arrangements, it seems that he will have to act in any market in which an exporter wishes to do business. In education legislation there is often a broad-brush approach—I have not seen this in any Department of Trade and Industry legislation—with details being left to subsequent regulations. It is stated that the Secretary of State shall make arrangements as appropriate. If that approach is adopted and it is considered that it is not appropriate to embrace countries such as Libya, the Secretary of State will not have to make the arrangements. If he wants to make arrangements for other countries as appropriate, so be it.
If the new clause is agreed to, my hon. Friend the Minister might like to think about including words such as


"the Secretary of State shall make arrangements as appropriate … for a minimum of three years." If such words were adopted, British industry would be reassured by the Government and would have greater self-confidence. It would feel that the Government were behind it. I ask my hon. Friend the Minister to consider placing some such words in the Bill. However, I accept the generous way in which he has expressed sympathy for the intent behind my amendment.

Mr. Den Dover: I, too, have been reassured by my hon. Friend the Minister. I ask, however, that the other place gives consideration to changing "shall" to "may". In that sense, I fully support the hon. Member for Cardiff, West (Mr. Morgan). If the new clause is accepted and the subsection is deleted, I hope that those in another place will give careful consideration to the issues involved. We must ensure that firms, especially small and medium-sized undertakings, have some support while the whole of the Export Credits Guarantee Department is privatised.

Mr. Michael: We have had an interesting debate during which Tory Members' concerns and worries have been made manifest, even though they have been expressed in half-hearted and, in some instances, almost sycophantic terms. I am pleased to be able to welcome the hon. Member for Leeds, North-West (Dr. Hampson) belatedly to the debate. I do not understand why he thought that we, the Opposition, would drag out the debate to cover his late arrival. I hope that he will be rather more convincing when he casts his vote at the end of the debate.
The hon. Member for Leeds, North-West said that he will not grieve if the amendment which we accepted in Committee is removed from the Bill. That is all very well, but it is clear that exporters will be less half-hearted and will grieve. It is clear also that considerable reassurance is needed for exporters and that that is not to be made available in the Bill.

Dr. Hampson: It is unfair to suggest that I expressed myself as baldly as that. I said that I would not grieve in the light of the expression of intent to deliver what exporters are wanting from my hon. Friend the Minister.

Mr. Michael: I take it that the hon. Gentleman will, in effect, support the amendment which he proposed and which Opposition Members supported in Committee when the House divides so that the small percentage of dissatisfaction that he says he still retains is thereby assuaged.
It is interesting that several Conservative Members seemed during the debate to awaken for the first time to the dangers that are inherent in this pointless piece of privatisation. The hon. Member for Bolton, North-East (Mr. Thurnham) asked several questions. I recommend that he reads the reports of the proceedings in Committee with some care. The Opposition pressed the Minister, as did exporters and the CBI, yet it appears that the Minister takes the view that he is the only person who is in step. He has said that the matters referred to by the hon. Member for Bolton, North-East probably involve long-term projects. What if they do not? Why not give the reassurance which was sought in Committee and which has been requested this evening?
The question that should be at the forefront of our minds is how we can protect, encourage and reassure our

exporters. I must tell Conservative Members who are new to these discussions that the lack of justification for the Bill was exposed in Committee, along with the lack of reassurance that has been forthcoming from the Minister.
The Insurance Services Group within the Exports Credit Guarantee Department has received universal praise for the efficient and effective way in which it undertakes its work. The hon. Member for Wirral, South (Mr. Porter) said that he was puzzled that the Minister seemed to be standing on his own. He asked why everyone seemed to disagree with his hon. Friend. The answer is that the Minister has it wrong. He has again sought to diminish the importance of the insurance services element within the Department's work overall. He told us that it is only about 2 per cent. of the overall business. I suggest that a reasonable piece of advice to the Government is that they should look after each 1 or 2 per cent. more effectively than at present so that the 100 per cent. with which they have dealt so disastrously over the past few years may look after itself more successfully. In other words, the Government should give more effective support, encouragement and reassurance to exporters so that we can move out of the dire situation in which the Government have put us.
The Minister sought to persuade us that he wishes to give a positive message to exporters. Given the way in which he has dealt with matters that have arisen during our consideration of the Bill, the only way in which he could give a positive message to exporters would be to resign from his present position. He told us that he must consider the words in the amendment, but hon. Members on both sides of the House have made it clear that that is not true. He could perfectly well have recognised the fears and promised to introduce an amendment worded to meet the fears of exporters. He spoke of the support that the Department is giving to British exporters, but his speech about his activities more or less rearranged the deckchairs on the Department of Trade and Industry as if it were some latter-day Titanic. It was irrelevant to the debate.
Before this privatisation measure was introduced, my hon. Friend the Member for Cardiff, West (Mr. Morgan) and I met the then Secretary of State, the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley). It became clear in our discussion that there was no justification for the measure. However, throughout the Committee and again today, we have sought to improve the measure and to suggest constructive changes.
The hon. Member for Surrey, North-West (Mr. Grylls) urged the Minister to listen and reassure exporters, but he said that he wanted as much privatisation as possible. I argue that the Government went too far in privatising the water industry and it is difficult to find anyone who wants this privatisation or believes that it will help in any way. Today, or, failing that, in the later stages of the Bill, we need reassurance from the Government.
The Committee accepted an amendment which gave legislative guarantees that the Government would retain an involvement with the insurance or reinsurance of political risk for at least three years after privatisation. At the conclusion of this short debate, I remind the House of the words of the British Electrotechnical and Allied Manufacturers Association, which were quoted by my hon. Friend the Member for Gateshead, East (Ms. Quin). It said:
This seemed the very least that could be done to allay the fears of British exporters.


It complained that the timing of the Government's amendment had left little room for manoeuvre. In other words, the attempt to remove the guarantee from the Bill was sprung on the House too late for elements in industry to gear themselves up to object. BEAMA complained:
uncertainty of the kind caused by this action has a potentially disastrous consequence for the confidence of Britain's exporters.
Those are serious words. I draw attention to the way in which the same objection was expressed by the Confederation of British Industry:
CBI Members continue to doubt the Government's future commitment to provide political risk insurance or reinsurance for short term exports to 'difficult' markets following the transfer of ECGD's Insurance Services business to the private sector.
Again, we have references to insecurity and mistrust and doubt of the Government from elements of the industry. After our experience in Committee, that seems justified.
The nature of the doubt of people in the export industry is clear. We could get rid of the doubt by accepting new clause 2. It would not only provide for the three years after privatisation but ensure that the new company would value, consult and work with exporters on whom we depend. Our new clause originally said:
The Secretary of State shall consult with the relevant trade and exporting associations to determine whether those arrangements should be continued for a further year and, if it is considered equitable in the national interest that those arrangements should be continued for a further year, they shall be so extended.
We address the interests of exporters and the national interest in a way that the Minister does not.
We have had a debate in which doubts about the Government's intentions have been expressed clearly. We shall set aside the temptation to press new clause 2 in order to seek the greatest consensus in the Chamber by voting on Government amendment No. 16 at a later stage. We set a test for Conservative Back-Bench Members who have expressed concern during this short debate. If any Conservative Member cares about exports and the fears expressed in the export industry, he or she will vote with us in the Lobby to retain the amendment agreed in Committee.

Mr. Sainsbury: With the leave of the House, may I say that I shall not detain the House long because I set out the position at some length earlier. The hon. Gentleman referred to doubt. If the new clause or the amendment tabled with the best of intentions by my hon. Friend the Member for Leeds, North-West (Dr. Hampson) were accepted, the doubt would be increased, for the reasons that I set out.
I fear that the hon. Member for Cardiff, South and Penarth—is that right?

Mr. Michael: Uncharacteristically, the Minister has got one thing right—the name of my constituency.

Mr. Sainsbury: How nice to be congratulated, even so obliquely.
The hon. Member for Cardiff, South and Penarth (Mr. Michael) did not listen to what was said. The drawback of the amendment is clear. The arrangements are not specified. Every piece of business involving exports to wherever and whatever the nature of the goods to be

insured would have to be accepted. That would be a foolish measure to impose on the Secretary of State. Certainly it would not help exporters. It would increase doubt.
The best way to reassure our exporters, whom we seek to support in every possible way, is to say, as I have already said, that the national interest facility will continue to be available after privatisation. We shall keep the requirement for the facility under review. My hon. Friend the Member for Leeds, North-West asked us to keep it for as long as it was needed. Subject to it performing satisfactorily as an ECGD trading facility, we intend to retain it for as long as the Government consider it essential to meet the reasonable needs of exporters.

Ms. Quin: I beg to ask leave to withdraw the clause.

Motion and clause, by leave, withdrawn.

Clause 1

ASSISTANCE IN CONNECTION WITH EXPORTS OF GOODS AND SERVICES

Mr. Michael: I beg to move amendment No. 3, in page 1, line 21 at end insert—
'(3A) The Secretary of State shall ensure that arrangements made under this section are in general no worse in terms of both scope and cost in comparison with those available to persons carrying on business in other OECD countries.'.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take amendment No. 7, in clause 8, page 5, line 31, at end insert—
'(5A) Any arrangements made under a scheme under this section shall in general be no worse in terms of both scope and cost in comparison with those available to persons carrying on business in other OECD countries.'.

Mr. Michael: The amendment would require the Export Credits Guarantee Department to provide export support facilities to United Kingdom exporters at a level and cost equal to or better than the facilities available to overseas competitors. The Secretary of State would have the responsibility for ensuring that that was the case. Would Conservative Members speak or vote against that simple principle? The amendment is intended to establish a level playing field for United Kingdom exporters. Clearly, it would be useful for United Kingdom exporters to be able to tackle the Government if, in their view, the Government failed at any time to provide export support equivalent to that which their rivals were receiving from their Governments or, arguably, from anyone else, although real export support can come only from Governments because they are the only entities likely to subsidise exports.
The Government frequently use the phrase "level playing field", but they usually mean that they intend to tilt the balance against someone in our society. In this case, the measure tilts the playing field against British exporters. The amendment seeks to restore some fairness to British exporters within the legislation.
Amendment No. 7 follows a similar approach. It says that arrangements should be made which are no worse in scope and cost in comparison with those available to persons carrying on business in other OECD countries. Exporters, especially with a current export turnover of less than £1 million, are becoming increasingly worried that privatisation of the Insurance Services Group will result in


large premium increases. That is not a new point. It was made in Committee and we have strong evidence from exporting companies of the nature of their fear. They fear that high premiums will place them at a competitive disadvantage with their European Community counter-parts, which will continue to have the benefit of direct support from their Governments.
The privatised company will not be required, as ISG is, to operate on a break-even basis, because profits to shareholders will be the primary motive of its owners. During the passage of the Water Bill through Parliament, we were continually reassured that any private company established as a result of the Government's action would behave in an uncharacteristic manner and would not be interested in the profit motive of its owners. We now know the truth of that matter. The Opposition, not the Government, had it right.
Additionally, the company will be subject to increased costs in the areas of taxation, including VAT, interest on borrowings, Treasury management, reassurance, on payment of dividends to the providers of capital, and on payment for professional and technical services, including taxation advice. All those costs will need to be met through increased premium income from exporters.
We fear that ISG may also incur higher salary costs, although that may be offset by lower staff numbers. The increased costs may be balanced by an increase in interest earned on cash surpluses and investments outside the Consolidated Fund. Reinsurance costs may be balanced by reinsurance benefits. However the new company will require additional professional and technical services, such as taxation advice.
The ISG will also have to recruit new skills into the management teams, such as reinsurance, Treasury management, company secretarial and taxation capabilities. The company will need to remain profitable after bearing all those additional costs. That is the degree to which the playing field is being tilted against exporters by the change that is being introduced.
I remind the House that the Kemp review into the operation of the department made great play of the requirement for a level playing field between official and private export credit insurers in the European Community —the perceived advantages enjoyed by the official credit insurers should be removed and complete parity should be introduced.
The level playing field argument is being pushed by private sector insurers, such as Namur, the Belgian insurer, whose case is before the European Court of Justice, and which is claiming that the European Commission has been dilatory in relation to the first non-life insurance directive, which currently exempts official credit insurers and Trade Indemnity, the current department's major rival in the United Kingdom.
However, in that report Mr. Kemp recognised:
the arguments about a level playing-field do not all run in one direction. The state insurers generally provide a much wider scope of cover than do those in the private sector, many of which focus on a fairly narrow area of specialisation in which they are confident of operating profitably. The state agencies, on the other hand, have a responsibility to support national exports generally and a constitutional duty to treat all applicants equally. For these reasons, they regularly have to provide cover for risks or to types of clients that the private sector would reject as not commercially interesting. Advantages such as freedom from corporation tax enjoyed by the official agencies could be seen as no more than reasonable compensation for the more onerous duties laid upon them. As

a matter of fact there is no evidence that the official agencies are regularly and significantly undercutting the private companies in prices at the present time.
I draw attention to the words:
have a responsibility to support national exports generally and a constitutional duty to treat all applicants equally.
Is that not something that we in the House would wish to continue following the privatisation of this part of the Export Credits Guarantee Department?
The amendment is concerned with the fact that privatisation will mean that there will not be a level playing field on which United Kingdom exporters can compete with other EC exporters. The ECGD is curtailing its support for short-term exports at a time when none of the department's major EC competitors is moving that far. All of the United Kingdom's major EC competitors are retaining, at the very least, their reinsurance back-up for private or quasi-private export credit insurers. Exporters in many EC countries will therefore continue to have the benefit of direct support from their Governments and United Kingdom exporters will be at a competitive disadvantage, as even the proposed limited United Kingdom Government support, by means of reinsurance and national interest support, will cease three years after privatisation.
Our plea, in these two amendments, is to play fair by British exporters and to allow them to be supported in the same way as our competitors in Europe will support their exporters. We plead with the Minister to accept these amendments and not to press ahead with his declared intention in Committee to place our exporters at a competitive disadvantage.

Mr. Sainsbury: To hear the hon. Member for Cardiff, South and Penarth (Mr. Michael) speak one would think that the Government provided no support to exporters. I hope that he was listening to what I said and that he appreciates that a considerable body of support is provided.
I was somewhat amused, in view of the hon. Gentleman's protestations about the importance that he and presumably his party attach to this issue, that at one moment during his eloquent address there was not one single member of his party on the Benches behind him. Now he has been reinforced—effectively, I am sure—by the presence of the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins). However, I would fear for British industry if that were a reflection of the Opposition's interest in these issues.
The amendments that the hon. Gentleman has placed before us would mean that the ECGD would not only be required to give medium or long-term coverage to any country for any project where another OECD country was willing to offer cover for a project, but that the facility to the new company would have to be provided irrespective of the cost and degree of financial risk. In effect, the ECGD would have to give cover on terms as good as those offered by any of the other 23 OECD countries.
As I am sure that the House will be aware, most member countries of the OECD, for a variety of reasons, want to be especially helpful in making export credit available to certain other countries. Their desire to be especially helpful to those countries with which they have traditional close links may show in the extent to which they make cover available in the first place, or in the terms under which it is offered, or both. It would not be sensible


to require ECGD to match every competitor in every market all the time. Certainly, no one else does that at present or is ever likely to do it.
Nevertheless, it has been a longstanding policy of successive Administrations that where ECGD is willing to offer cover, it should match the length of credit available from other official agencies when United Kingdom exporters are competing for a specific project. That is an example of the sort of support that the hon. Member for Cardiff, South and Penarth overlooks, because under the fixed rate export finance arrangements —which, interestingly, were introduced in 1972 by the then Minister for Trade and Consumer Affairs, who, as some of my hon. Friends will recall, was my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe)—the ECGD is able to support United Kingdom banks in the provision of export finance to overseas buyers of capital goods and projects sold on credit terms of two years or more in accordance with the terms specified in the international consensus. In practice, that means that the ECGD offers similar terms to other export credit agencies.
Meanwhile, the ECGD has introduced a portfolio management system and changes in the way that it calculates premium rates for project business. In future, rates should better reflect the quality of risk. Premium rates will fall for the better-quality risk, while they will rise for the worst risks.
Looking further ahead, increasing consideration is being given to the general agreement on tariffs and trade regulations, which require that premium rates for export credit insurance should cover the cost of administration and claims.
Only last Friday the OECD export credit group welcomed a paper which has been prepared by the ECGD on that subject. It is now clear that the campaign to eliminate subsidies from premium rates charged by official credit insurers is firmly on the agenda. The expectation must be that we shall be increasing pressure to that end, and that progress will be made steadily to reduce and eliminate subsidies.
In the past, I have no doubt that risks have not been sufficiently differentiated in premium terms and the changes now being introduced will mean that there will be increases—some large—in the riskiest markets. However, ECGD has found that exporters would prefer that some cover is available rather than no cover and price will assist availability.
I stress that premium rates are not being increased to recoup the ECGD's past losses. Perhaps the increases to which I referred should be put into perspective. If we take the ECGD's current average premium rate for project exports—long-term exports—of 5 per cent., a premium increase of up to 15 per cent. would add only three quarters of 1 per cent. to the export price. Other cost increases—increases in the cost of wages and raw materials, for instance—are therefore likely to be much more significant, especially if the long manufacturing delivery period associated with such exports is taken into account.
The drafting of amendment No. 7 shows the same lack of precision as that of amendment No. 3. It would not be realistic, for short-term business any more than for

long-term business, to compare the terms and conditions on which cover is made available between the various schemes offering short-term cover.
I believe that the competitive pressures that result from privatisation—which is opposed so strongly by the hon. Member for Cardiff, South and Penarth—will ensure that the exporter is offered a steadily improving service, and that the company will offer a wider range of facilities, on terms that are attractive to its customers; that includes prices. The amendments are neither sensible nor practicable, and I urge the House to reject them.

7 pm

Mr. Michael: The Minister said that it is "neither sensible nor practicable" to make arrangements that are, in general, no worse in terms of both scope and cost than those available to persons carrying on business in other OECD countries. What an admission of failure that is. I note that during his speech few Conservative Members were present. [Interruption.] Welcome back to school. What those Conservative Members have in common is that not one was listening to the Minister's speech. I am glad to note that they are, at least, listening to mine.
Characteristically, the Minister chose to ignore the case that has been made out to him—to ignore the interests of exporters, and to answer a different debate from the one that we had instigated. I did not say that his Department gave no support to exporters; what I do say is that the Government and the Minister give them inadequate support, and that the Bill will diminish that support. The Government are failing to give our exporters the support that our competitors are giving theirs. It is for that that the Minister stands condemned tonight.
We shall seek to withdraw our amendment tonight, because it—and amendment No. 7—will be pursued in another place. We shall, however, proceed to a vote on Government amendment No. 16, and it will be interesting to see whether any Conservative Back Benchers vote with the Opposition to seek to protect the interests of exporters in the United Kingdom.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4

PROVISIONS SUPPLEMENTARY TO SECTIONS I TO 3

Amendment proposed: No. 16, in page 3, line 1, leave out subsection (2).—[Mr. Sainsbury.]

Question put, That the amendment be made:—

The House divided: Ayes 285, Noes 188.

Division No. 108]
[7.03 pm


AYES


Aitken, Jonathan
Baldry, Tony


Alexander, Richard
Banks, Robert (Harrogate)


Alison, Rt Hon Michael
Barnes, Mrs Rosie (Greenwich)


Allason, Rupert
Batiste, Spencer


Amery, Rt Hon Julian
Beaumont-Dark, Anthony


Amess, David
Bendall, Vivian


Amos, Alan
Bennett, Nicholas (Pembroke)


Arbuthnot, James
Biffen, Rt Hon John


Arnold, Jacques (Gravesham)
Blackburn, Dr John G.


Arnold, Sir Thomas
Blaker, Rt Hon Sir Peter


Ashby, David
Body, Sir Richard


Aspinwall, Jack
Bonsor, Sir Nicholas


Atkins, Robert
Boscawen, Hon Robert


Atkinson, David
Boswell, Tim


Baker, Rt Hon K. (Mole Valley)
Bottomley, Mrs Virginia


Baker, Nicholas (Dorset N)
Bowden, Gerald (Dulwich)






Bowis, John
Hayes, Jerry


Boyson, Rt Hon Dr Sir Rhodes
Hayhoe, Rt Hon Sir Barney


Brandon-Bravo, Martin
Hayward, Robert


Brazier, Julian
Heathcoat-Amory, David


Bright, Graham
Heseltine, Rt Hon Michael


Brown, Michael (Brigg &amp; Cl't's)
Hicks, Mrs Maureen (Wolv' NE)


Bruce, Ian (Dorset South)
Higgins, Rt Hon Terence L.


Buck, Sir Antony
Hill, James


Budgen, Nicholas
Holt, Richard


Burns, Simon
Hordern, Sir Peter


Butler, Chris
Howard, Rt Hon Michael


Butterfill, John
Howe, Rt Hon Sir Geoffrey


Carlisle, John, (Luton N)
Howell, Ralph (North Norfolk)


Carlisle, Kenneth (Lincoln)
Hughes, Robert G. (Harrow W)


Carrington, Matthew
Hunt, Rt Hon David


Cash, William
Hunt, Sir John (Ravensbourne)


Channon, Rt Hon Paul
Irvine, Michael


Chapman, Sydney
Irving, Sir Charles


Chope, Christopher
Jack, Michael


Churchill, Mr
Janman, Tim


Clark, Rt Hon Alan (Plymouth)
Jessel, Toby


Clark, Dr Michael (Rochford)
Johnson Smith, Sir Geoffrey


Clark, Rt Hon Sir William
Jones, Gwilym (Cardiff N)


Clarke, Rt Hon K. (Rushcliffe)
Jones, Robert B (Herts W)


Colvin, Michael
Jopling, Rt Hon Michael


Coombs, Anthony (Wyre F'rest)
Kellett-Bowman, Dame Elaine


Coombs, Simon (Swindon)
King, Rt Hon Tom (Bridgwater)


Couchman, James
Kirkhope, Timothy


Cran, James
Knapman, Roger


Currie, Mrs Edwina
Knight, Greg (Derby North)


Davies, Q. (Stamf'd &amp; Spald'g)
Knox, David


Davis, David (Boothferry)
Latham, Michael


Day, Stephen
Lawrence, Ivan


Devlin, Tim
Leigh, Edward (Gainsbor'gh)


Dickens, Geoffrey
Lennox-Boyd, Hon Mark


Dicks, Terry
Lester, Jim (Broxtowe)


Douglas-Hamilton, Lord James
Lilley, Rt Hon Peter


Dover, Den
Lloyd, Sir Ian (Havant)


Durant, Sir Anthony
Lloyd, Peter (Fareham)


Dykes, Hugh
Lord, Michael


Emery, Sir Peter
Luce, Rt Hon Sir Richard


Evans, David (Welwyn Hatf'd)
Lyell, Rt Hon Sir Nicholas


Evennett, David
Macfarlane, Sir Neil


Fallon, Michael
MacGregor, Rt Hon John


Favell, Tony
MacKay, Andrew (E Berkshire)


Fenner, Dame Peggy
Maclean, David


Field, Barry (Isle of Wight)
McLoughlin, Patrick


Fishburn, John Dudley
McNair-Wilson, Sir Patrick


Fookes, Dame Janet
Madel, David


Forman, Nigel
Malins, Humfrey


Forsyth, Michael (Stirling)
Mans, Keith


Fowler, Rt Hon Sir Norman
Marland, Paul


Fox, Sir Marcus
Marlow, Tony


Freeman, Roger
Marshall, John (Hendon S)


French, Douglas
Marshall, Sir Michael (Arundel)


Fry, Peter
Martin, David (Portsmouth S)


Gill, Christopher
Mates, Michael


Glyn, Dr Sir Alan
Maude, Hon Francis


Goodhart, Sir Philip
Maxwell-Hyslop, Robin


Goodlad, Alastair
Mayhew, Rt Hon Sir Patrick


Goodson-Wickes, Dr Charles
Meyer, Sir Anthony


Gorman, Mrs Teresa
Miller, Sir Hal


Gorst, John
Mills, Iain


Grant, Sir Anthony (CambsSW)
Miscampbell, Norman


Greenway, Harry (Ealing N)
Mitchell, Andrew (Gedling)


Greenway, John (Ryedale)
Mitchell, Sir David


Gregory, Conal
Moate, Roger


Griffiths, Peter (Portsmouth N)
Monro, Sir Hector


Grist, Ian
Montgomery, Sir Fergus


Ground, Patrick
Morris, M (N'hampton S)


Grylls, Michael
Morrison, Sir Charles


Hague, William
Moss, Malcolm


Hamilton, Hon Archie (Epsom)
Mudd, David


Hamilton, Neil (Tatton)
Neale, Sir Gerrard


Hannam, John
Needham, Richard


Hargreaves, A. (B'ham H'll Gr')
Nelson, Anthony


Hargreaves, Ken (Hyndburn)
Newton, Rt Hon Tony


Harris, David
Nicholls, Patrick


Haselhurst, Alan
Nicholson, David (Taunton)


Hawkins, Christopher
Nicholson, Emma (Devon West)





Norris, Steve
Stanbrook, Ivor


Onslow, Rt Hon Cranley
Stanley, Rt Hon Sir John


Oppenheim, Phillip
Steen, Anthony


Page, Richard
Stern, Michael


Paice, James
Stevens, Lewis


Parkinson, Rt Hon Cecil
Stewart, Andy (Sherwood)


Patnick, Irvine
Stewart, Rt Hon Ian (Herts N)


Patten, Rt Hon Chris (Bath)
Stokes, Sir John


Patten, Rt Hon John
Sumberg, David


Pattie, Rt Hon Sir Geoffrey
Summerson, Hugo


Peacock, Mrs Elizabeth
Tapsell, Sir Peter


Porter, Barry (Wirral S)
Taylor, Ian (Esher)


Porter, David (Waveney)
Taylor, Teddy (S'end E)


Portillo, Michael
Tebbit, Rt Hon Norman


Powell, William (Corby)
Thatcher, Rt Hon Margaret


Price, Sir David
Thompson, D. (Calder Valley)


Raison, Rt Hon Sir Timothy
Thorne, Neil


Rathbone, Tim
Thurnham, Peter


Renton, Rt Hon Tim
Tracey, Richard


Rhodes James, Robert
Tredinnick, David


Riddick, Graham
Trippier, David


Ridley, Rt Hon Nicholas
Trotter, Neville


Rifkind, Rt Hon Malcolm
Vaughan, Sir Gerard


Roberts, Sir Wyn (Conwy)
Viggers, Peter


Rost, Peter
Waldegrave, Rt Hon William


Rowe, Andrew
Walden, George


Rumbold, Rt Hon Mrs Angela
Walker, Bill (T'side North)


Ryder, Rt Hon Richard
Walker, Rt Hon P. (W'cester)


Sackville, Hon Tom
Walters, Sir Dennis


Sainsbury, Hon Tim
Ward, John


Sayeed, Jonathan
Watts, John


Scott, Rt Hon Nicholas
Wells, Bowen


Shaw, David (Dover)
Wheeler, Sir John


Shaw, Sir Giles (Pudsey)
Whitney, Ray


Shelton, Sir William
Widdecombe, Ann


Shephard, Mrs G. (Norfolk SW)
Wiggin, Jerry


Shepherd, Colin (Hereford)
Wilkinson, John


Shepherd, Richard (Aldridge)
Wilshire, David


Shersby, Michael
Winterton, Mrs Ann


Sims, Roger
Wolfson, Mark


Skeet, Sir Trevor
Wood, Timothy


Smith, Sir Dudley (Warwick)
Woodcock, Dr. Mike


Smith, Tim (Beaconsfield)
Yeo, Tim


Soames, Hon Nicholas
Young, Sir George (Acton)


Speed, Keith



Speller, Tony
Tellers for the Ayes:


Spicer, Sir Jim (Dorset W)
Mr. David Lightbown and


Spicer, Michael (S Worcs)
Mr. John M. Taylor.


Squire, Robin





NOES


Abbott, Ms Diane
Campbell, Menzies (Fife NE)


Adams, Mrs Irene (Paisley, N.)
Campbell, Ron (Blyth Valley)


Allen, Graham
Campbell-Savours, D. N.


Anderson, Donald
Canavan, Dennis


Archer, Rt Hon Peter
Carlile, Alex (Mont'g)


Armstrong, Hilary
Clark, Dr David (S Shields)


Ashley, Rt Hon Jack
Clarke, Tom (Monklands W)


Ashton, Joe
Cohen, Harry


Banks, Tony (Newham NW)
Cook, Frank (Stockton N)


Barnes, Harry (Derbyshire NE)
Cook, Robin (Livingston)


Barron, Kevin
Cousins, Jim


Battle, John
Crowther, Stan


Beckett, Margaret
Cryer, Bob


Bellotti, David
Cummings, John


Benn, Rt Hon Tony
Cunliffe, Lawrence


Bennett, A. F. (D'nt'n &amp; R'dish)
Cunningham, Dr John


Benton, Joseph
Dalyell, Tam


Bermingham, Gerald
Darling, Alistair


Bidwell, Sydney
Davies, Rt Hon Denzil (Llanelli)


Blair, Tony
Davies, Ron (Caerphilly)


Blunkett, David
Davis, Terry (B'ham Hodge H'l)


Boyes, Roland
Dewar, Donald


Bradley, Keith
Dixon, Don


Bray, Dr Jeremy
Doran, Frank


Brown, Nicholas (Newcastle E)
Duffy, A. E. P.


Brown, Ron (Edinburgh Leith)
Dunnachie, Jimmy


Buckley, George J.
Dunwoody, Hon Mrs Gwyneth


Caborn, Richard
Eadie, Alexander


Callaghan, Jim
Evans, John (St Helens N)






Ewing, Mrs Margaret (Moray)
Michael, Alun


Fatchett, Derek
Michie, Mrs Ray (Arg'l &amp; Bute)


Field, Frank (Birkenhead)
Mitchell, Austin (G't Grimsby)


Flannery, Martin
Morgan, Rhodri


Flynn, Paul
Morley, Elliot


Foot, Rt Hon Michael
Morris, Rt Hon A. (W'shawe)


Foster, Derek
Morris, Rt Hon J. (Aberavon)


Fraser, John
Mowlam, Marjorie


Fyte, Maria
Mullin, Chris


Galbraith, Sam
Murphy, Paul


Galloway, George
Nellist, Dave


Garrett, John (Norwich South)
Oakes, Rt Hon Gordon


Garrett, Ted (Wallsend)
O'Brien, William


George, Bruce
O'Neill, Martin


Gilbert, Rt Hon Dr John
Orme, Rt Hon Stanley


Godman, Dr Norman A.
Parry, Robert


Golding, Mrs Llin
Patchett, Terry


Gould, Bryan
Pendry, Tom


Graham, Thomas
Pike, Peter L.


Grant, Bernie (Tottenham)
Powell, Ray (Ogmore)


Griffiths, Nigel (Edinburgh S)
Prescott, John


Griffiths, Win (Bridgend)
Primarolo, Dawn


Grocott, Bruce
Quin, Ms Joyce


Hardy, Peter
Radice, Giles


Healey, Rt Hon Denis
Randall, Stuart


Henderson, Doug
Redmond, Martin


Hinchliffe, David
Rees, Rt Hon Merlyn


Hoey, Ms Kate (Vauxhall)
Reid, Dr John


Hogg, N. (C'nauld &amp; Kilsyth)
Richardson, Jo


Home Robertson, John
Robertson, George


Hood, Jimmy
Rogers, Allan


Howarth, George (Knowsley N)
Rooney, Terence


Howells, Dr. Kim (Pontypridd)
Ross, Ernie (Dundee W)


Hughes, John (Coventry NE)
Rowlands, Ted


Hughes, Robert (Aberdeen N)
Ruddock, Joan


Hughes, Roy (Newport E)
Sedgemore, Brian


Illsley, Eric
Sheerman, Barry


Ingram, Adam
Shore, Rt Hon Peter


Janner, Greville
Short, Clare


Lambie, David
Sillars, Jim


Lamond, James
Skinner, Dennis


Leadbitter, Ted
Smith, C. (Isl'ton &amp; F'bury)


Leighton, Ron
Smith, Rt Hon J. (Monk'ds E)


Lestor, Joan (Eccles)
Smith, J. P. (Vale of Glam)


Livingstone, Ken
Soley, Clive


Lloyd, Tony (Stretford)
Spearing, Nigel


Lofthouse, Geoffrey
Steel, Rt Hon Sir David


Loyden, Eddie
Stott, Roger


McAllion, John
Strang, Gavin


McAvoy, Thomas
Taylor, Matthew (Truro)


McCartney, Ian
Thompson, Jack (Wansbeck)


Macdonald, Calum A.
Wallace, James


McFall, John
Wardell, Gareth (Gower)


McKay, Allen (Barnsley West)
Wareing, Robert N.


McKelvey, William
Welsh, Michael (Doncaster N)


McLeish, Henry
Williams, Rt Hon Alan


McMaster, Gordon
Williams, Alan W. (Carm'then)


McNamara, Kevin
Wilson, Brian


McWilliam, John
Winnick, David


Madden, Max
Wise, Mrs Audrey


Mahon, Mrs Alice
Worthington, Tony


Marek, Dr John
Wray, Jimmy


Marshall, David (Shettleston)
Young, David (Bolton SE)


Martin, Michael J. (Springburn)



Maxton, John
Tellers for the Noes:


Meacher, Michael
Mr. Frank Haynes and


Meale, Alan
Mr. Ken Eastham.

Question accordingly agreed to.

Clause 6

COMMITMENT LIMITS

Mr. Sainsbury: I beg to move amendment No. 17, in page 4, line 30, leave out from 'at' to end of line 33 and insert

'intervals determined from time to time by the Secretary of State with the consent of the Treasury and in accordance with principles so determined.'
During the Standing Committee discussion of clause 6, it was proposed that the word "may" should be deleted and replaced with the word "shall." That was proposed as an amendment at several places in the Bill. In the debate the point was made that the Secretary of State has to determine principles for the conversion of foreign currency commitments into special drawing rights if he is to meet his other obligations under clauses 6 and 7. I agreed in Committee to consider the amendment further. The wording now proposed makes it clear that the Secretary of State is required to lay down principles for the conversion of foreign currency commitments into SDRs. He will do this whenever necessary and with Treasury agreement.
In Committee interest was expressed in the principles that the Secretary of State might be called upon to determine under subsection (5)(e). The principles usually relate to mechanical operations that may be subject to change over time and for which it is therefore difficult to make statutory provision. Perhaps I could give two examples. The first would be deciding the precise rate to be used for converting individual foreign currency into SDRs. The closing rate for the last day of the quarter, as shown in the Financial Times, is used. The second example would be how to convert currencies for which no SDR conversion rate is quoted in the Financial Times—say, Australian and Hong Kong dollars. The current practice is to convert them into United States dollars by taking the average of the buying and selling rates, as quoted in the Financial Times, and converting it into the United States dollar equivalent. Because of the need to deal with unusual situations, such as those involving Hong Kong and Australian dollars, it would be inappropriate that the precise conversion mechanisam should be spelled out in the statute. That would be unhelpfully inflexible. We have encountered this point on earlier amendments.
This is a minor technical change. I hope that the hon. Lady is listening when I say that we are grateful to the Opposition for drawing attention to this shortcoming in the text of the Bill. I have pleasure in presenting the amendment to the House.

Ms. Quin: We are grateful to the Minister for taking into account the points that we made in Committee and for his proposal to amend the Bill accordingly. Obviously, we shall not oppose the amendment. However, I should like to ask the Minister for some information. He referred to the principles that govern the conduct of the Secretary of State and the Treasury in dealing with the provisions of this part of the Bill. Will there be an opportunity for parliamentary scrutiny of the principles, especially if they change?

Mr. Sainsbury: The amendment with which we shall next deal concerns the reporting arrangements. This is the sort of issue that could well be covered in the annual reports if the principles applying to the same sort of currency conversion should change.

Amendment agreed to.

Clause 7

RETURNS

Mr. Sainsbury: I beg to move amendment No. 18, in page 4, line 43, at beginning insert
'The Secretary of State shall prepare an annual report on the discharge of his functions under sections Ito 5 of this Act. (1A)'.

Mr. Deputy Speaker: With this it will be convenient to consider Government amendment No. 19.

Mr. Sainsbury: During consideration of amendments Nos. 93 and 111 on 19 February in the Standing Committee, the view was expressed that there should be a statutory requirement on the Government to lay the ECGD's annual report and trading accounts before Parliament. During our discussions I drew attention to the high level of reporting to Parliament to which the ECGD, as a Government trading organisation, is committed. Already, annual trading accounts which are statutorily required under exchequer and audit legislation are laid before Parliament, as are annual estimates and appropriation accounts. Of course, the report of the Department of Trade and Industry itself, which, from this year, replaces the public expenditure White Paper, also refers to the work of the ECGD. Then there are the reports to Parliament, under clause 7, on ECGD commitments against statutory ceilings.
However, I recognise the merits of supplementing the existing reporting requirements with a statutory obligation on the Secretary of State to submit an annaul report. In Committee, I undertook to consider the feasibility of finding the right words for such a provision. The purpose of the amendment is to put into effect the wishes expressed by members on both sides of the Committee. It requires the Secretary of State to submit to Parliament an annual report on the discharge of his functions under clauses 1 to 5.
Amendment No. 19 is consequential. It places on the Secretary of State a statutory duty to produce a report. Although final decisions on the precise form and content of the new statutory report have not yet been taken, my basic intention is that the existing annual report—there is no statutory responsibility to table the existing report, but it has been placed in the Library—should represent the starting point for the new statutory report. Changes will be necessary to reflect the ECGD's changed role after the privatisation of the Insurance Services Group, and, indeed, with the new powers conferred by the Bill, particularly those provided for in clause 3.
The annual report—the one which we do not have statutory responsibility to table but which is placed in the Library—covers various topics. These include a review of the year's activities of the various groups and divisions, detailed reports and accounts of trading operations, a brief report of the non-trading operations—the public expenditure programmes operated by the ECGD, such as the fixed rate export finance scheme, to which I referred earlier—and developments within international forums, such as the OECD and the European Community's policy co-ordination group.
As new activities permitted by the Bill come on stream, provisions will need to be added to cover financial management activities authorised under clause 3—bond issues, cross-currency and interest-rate swaps, which were referred to during the Committee stage—and services that

might be provided by the ECGD for a fee, as authorised by clause 5. In addition, it may be possible for the annual report to contain an expanded section on the non-trading operations of the new ECGD, possibly building in elements currently contained in the public expenditure report of the Department of Trade and Industry. The report might contain also a summary of returns made under clause 7 of commitments logged against the statutory ceiling. It is my intention also that the separate annual report required in relation to investment insurance activities should be subsumed into the new report.
I hope that the House will accept these amendments, which reflect the wishes expressed in Committee. They will further improve the already quite extensive reporting arrangements for the ECGD.

Ms. Quin: These amendments are not controversial. They go a little way towards meeting some of the concerns that we expressed in Committee. Parliamentary accountability is a theme that we raised several times during the course of the debate. Since the legislation as a whole is controversial, we are concerned to ensure that the ECGD, in its new form, will be properly scrutinised by Parliament, just as we are concerned that Parliament should have some involvement in how the privatised company—the new ISG —operates. We welcome the extra commitment that these amendments represent.
The Minister did not say anything about the timing of the presentation of the report and the returns. Of course, the Bill provides that they should be made as soon as practicable after 31 March each year. I should like the Minister to confirm that that is the situation. In Committee he said that in the first year it would be difficult to meet the deadline of 31 March but that the Government's aim in subsequent years would be to present the report and the returns very shortly after that date. I hope that the Minister will be able to give us a clear commitment on the matter.
We take very seriously the issue of parliamentary accountability. We shall certainly want the maximum information on the operation of the continuing ECGD. It is well known—we have highlighted the issue already this evening—that exporters are very concerned about how the continuing ECGD and the privatised company will operate. Especially in the early days, we shall want to scrutinise very closely the practical implications of these changes for exporters. For that reason, the information given to Parliament will be very important. We shall need to be in a position to debate the information, having had access to it in good time.

Mr. Cousins: I do not want to detain the House unduly, but it would be churlish not to welcome the Minister's remarks and his commitment to use the annual report as an important source of information to the business community and to members of the public who are interested. This is something that many of us on the Standing Committee suggested. We welcome the proposal to deploy the annual report to some degree as a means of engaging in the continuing debate about the direction of the remaining activities of the Export Credits Guarantee Department. To that end, following the Minister's suggestions as to what the annual report might contain, can he tell us whether it will contain an area-by-area analysis? By that I mean areas of the world. The annual report for 1986–87 contains an interesting breakdown of


area-by-area exposure in different country groups. I hope that that helpful feature will continue to appear in annual reports.
The Minister mentioned some changes that he proposed to make in the work of ECGD in regard to the assurances he gave in our previous debate. Can he assure us that the annual report will rehearse and repeat the way in which those undertakings are borne out in practice, and that any intention to review the continuation of political reinsurance on a national interest basis, as the Minister said might happen, will be flagged up clearly in the annual report so that there will be plenty of time to consider its implications?

Mr. Sainsbury: On the timing of the report, as the hon. Member for Gateshead, East (Ms. Quin) said, it will be as soon as practicable after 31 March. As I said in Committee, those words mean exactly what they say. After the first report, which obviously carries certain difficulties, it is our intention to meet that deadline or improve on it. If we did not do so, and if there were any unreasonable delay, because those words will be on the statute book, a Secretary of State could be got at for failing to discharge his statutory responsibilities. That is the value of including those words in the statute.
Issues such as area-by-area coverage, which was mentioned by the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), could certainly be included in the annual report and could even be expanded. He referred to national interest reinsurance. There are commercial and diplomatic reasons which I explained earlier for not listing the countries for which reinsurance is required, particularly as that could be damaging to the interests of exporters to those countries. We take it as a primary purpose of the report that nothing in it should do anything other than help, and certainly should not in any way hinder, British exporters. With that proviso, we shall seek to make the report as full as is reasonably possible.

Amendment agreed to.

Amendment made: No. 19, in page 5, line 3, leave out 'A return' and insert 'Reports and returns prepared".—[Mr. Sainsbury.]

Clause 8

SCHEME OF TRANSFER

Mr. Michael: I beg to move amendment No. 4, in page 5, line 28, at end insert—
'(4A) A scheme under this section shall contain no provision which may force any person to cease to be employed in the service of the state.'.

Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to take the following amendments: No. 23, in page 5, line 35, at end insert—
'(8) No civil servant will be transferred to the new organisation until such time as they have given their consent, in writing, for such a transfer to the Permanent Secretary.'.
No. 9, in clause 9, page 6, line 7, at end add—
'(c) he shall be allowed, on his request, to re-enter the service of the state within two years of the commencement of his employment by a transferee.'.
No. 26, in clause 9, page 6, line 7, at end add—

`(4) No member of the executive, administrative and support staff shall transfer unless he or she has previously consented to do so in writing.'.

Mr. Michael: These amendments raise issues concern-ing people who are now in public service and who are worthy of respect as civil servants. Despite what the Government appear to intend, they are not chattels to be despatched into the private sector with disdain and lack of consideration.
Amendment No. 4 addresses the fact that staff in the Insurance Services Group fear that so few of them will volunteer to join the privatised company that, to ensure its viability, management will try to compel them to transfer to it. One understanding of the Transfer of Undertakings (Protection of Employment) Regulations 1981 is that any employees occupying ISG posts at the time of the transfer to the purchaser must transfer to the privatised company. Even if the employment terms offered by the purchaser are, as the Government have promised, broadly comparable to current civil service terms, there are advantages to civil service employment that are unlikely to be replicated in the private sector. Not only is a fully index-linked pension scheme unlikely to be offered, but the security of employment in a large, nation-wide staffing pool cannot be available in a private company and that entails an increased potential for redundancy and a reduction in promotion and personal development prospects.
The amendment is intended to prevent any member of ECGD being compelled to join the new ISG insurance company or being made compulsorily redundant under the terms of the scheme established to convert it into a Government-owned company.
Amendment No. 23 addresses what many see as a disregard of the reasons for which people enter the civil service. Many of them chose to make a career in that sector and have given years of dedicated service to it. That should be respected. I am gravely disappointed by answers that I have received from Ministers at the Department of Trade and Industry, and particularly from the Minister responsible for the civil service, about protecting staff who wish to remain in public service. The amendment would ensure that proper consideration and respect is given to civil servants when they decide whether to join the new company.
Amendment No. 26 also emphasises the importance of choice. I should have hoped that all right hon. and hon. Members would enthusiastically support that.
Amendment No. 9 would allow an employee to
re-enter the service of the state within two years of the commencement of his employment by a transferee".
That change would make it possible for all staff currently in the ECGD who join the new ISG insurance company to return, if they wish, to the civil service at any time up to two years after they start work in the new company. It is not open-ended; it is time-limited and it is reasonable. It would mean that staff who, perhaps for domestic reasons such as children at school or a spouse at work in Cardiff, have no choice but to join the new company would have the right, for a limited period, to rejoin the civil service. That might be when the children have left school or their spouse is able to find a new job elsewhere. The amendment would guarantee a return not specifically to the ECGD, but in general to public service.
There has been disappointment at the failure of Ministers to respect and protect the position of civil


servants, whose choice to remain in public service should be protected by the House. In recent years, the Government have sought to undermine public service and to discredit it publicly just as they have sought to discredit local government service. That is both sad and wrong. It is greatly to the credit of civil servants generally that so many of them continue to display such dedication and integrity in their work. It is greatly to the credit of the civil servants to whom I refer that the Insurance Services Group is so highly respected. Without exception, those who have made representations to us during the passage of the Bill have paid tribute to its efficiency and effectiveness. The tributes have come from employers in the private sector and those involved in our export industry. For that reason, I hope that the Minister will join the Opposition in protecting, and respecting, those who have chosen to make a career in the public service.

Mr. Morgan: I support what my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) said about our attempts to beef up the protection of the staff affected by clauses 8 and 9 and to strengthen the rights given to employees under the scheme of transfer and the regulations in clause 9. My hon. Friend put his finger on the button when he said that there was something Orwellian about the Government's attitude to the public sector. It is a matter of "public bad, private good". They do not analyse the particular circumstances or consider the people involved because they have a straightforward ideological belief.
As Members of Parliament for Cardiff, we meet the real people involved. One cannot tell those civil servants who have been involved—perhaps on a life-time career basis —and dedicated to their work, some nonsense about the public sector being bad and the private sector good. It does not fit in with reality.
Our constituents who are ECGD staff generally fall into three broad categories. The junior staff have generalised skills in administrative, clerical, financial and personnel work and can transfer to other Departments without too much difficulty because there is not much difference between administrative or clerical work in the ECGD and in other Departments. There are other civil service Departments in Cardiff, Newport and elsewhere to which they can transfer—the Business Statistics Office, the Welsh Office, Companies House and the Inland Revenue. They employ thousands of people and junior staff may get jobs there when they are trawled under the civil service transfer procedures. We are anxious to enable people with such generalised skills to be given the time that they might need to make their choice.
The most senior category of people have highly specialised skills, but they nevertheless think of themselves primarily as civil servants. They may have joined the service at 16 or 18 years of age and may have gone through 10 promotions to reach the position of great responsibility that they now hold in the ECGD. They are probably 50 years of age or over and are beginning to think of themselves as life-time career civil servants. They might not find it very attractive to transfer, because within seven, eight or nine years they will draw their civil service pensions. Their functions are highly specialised and we should consider whether it is fair to push them into the private sector company when they have little time in their life-time careers to adjust to the idea of being employed by Trade Indemnity or Assicutazioni Generali. When they are

asked at the golf club or down the pub, "What do you do for a living?", they have always said that they were civil servants. Suddenly, they would have to say that they worked for Assicutazioni Generali, and they do not want that. They are too old to be able to absorb such a change. They are used to the idea of being able to draw a civil service pension at 60 or, if they have worked for 40 years, a little sooner—as is common these days—and they do not want to transfer.
What should we do for such people, because they are very important to the organisation? If they have been with ECGD for 20 years or more, they are probably in responsible positions and without them the business will be in difficulties. If they feel that they are being treated like chattels, as my hon. Friend the Member for Cardiff, South and Penarth said, the transfer scheme will be heading for big trouble.
The middle group of people are those who have worked for perhaps 10 years for ECGD and have what might be called executive responsibilities. Their jobs are also fairly specialised and we have attempted to cover them by saying that they may be willing to give Assicutazioni Generali from Trieste a reasonable shot if it is the successful bidder. They may be willing to join the company, but it might not suit them and they might find that Triestino ways of working are not those of Cardiff or of Britain. If, after two years, they decide that it is no good, they may beg, "Can I please be given a chance at the Inland Revenue, Companies House or BSO or a transfer to London?" They may have come from London 11 or 12 years ago. What can we do for them? Apparently, the legislation will mean that they are forced to go and have no choice. If they do not like it, they are out and must accept redundancy. They will be treated like the GCHQ trade unionists and, if they hold out, they will receive redundancy, a bit of a premium and a goodbye. Is that the attitude that the Government want to communicate to civil servants who, the Government say, provide an A1 service to exporters through their commitment to the job and to advancing technology in the job?
We ask the Government to take seriously our attempts to strengthen the rights of employees, because that will help them to make the employees believe that the Government really care about them and that the Government realise that it is people-oriented business. It is all about computers and a lot of valuable people. If the people walk out of the job, the transfer scheme will not work and British exports will suffer.
7.45 pm
I look forward to hearing from the Minister, not the usual waffle about the amendment not achieving the objectives or the wording not achieving what the Opposition hope, but genuine respect for the people for whom we are legislating. If he does not show that respect, the Government do not deserve to have the Bill passed or to be able to effect a successful transfer to the privatised sector.

Mr. Sainsbury: I can say straightaway that we recognise and pay tribute—as I did on several occasions in Committee—to the skill, commitment and calibre of the work force of ECGD. I am sure that everyone will recognise that the calibre of the staff is one of the most —if not the most—important aspects of any business. In the world of financial services, which we are talking about,


it is especially important and we have heard many tributes paid to the quality of ECGD staff. I hope that we shall be committed to providing a first-class service to British exporters after privatization—or an even better service than is provided now.
We must consider the amendments against the background not only of our commmitment to the staff and our respect for their calibre and what they have given to the business, but of the importance that we attach to their commitment to the success of the Insurance Services Group. We shall expect the buyer of the new company to show an immense commitment to the success of the ISG and, as a purchaser, he will expect a similar commitment from his staff. Against that background, the amendments would not be helpful.
Amendments Nos. 4, 23 and 26 would limit the staff to be transferred to the new company to volunteers only. It is possible that the number of volunteers will not accord with the business requirements of that company. The ECGD privatisation is unlike some others in that only about half of the total organisation—measured by the number of staff—will be privatised. That gives much more scope than is normal for meeting the preferences of individual members of staff. My right hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) stated as long ago as 18 December 1989 that all ECGD staff would be asked to express a preference on whether to join the new company and that
ECGD will use its best endeavours to meet their wishes where these are consistent with the business needs of ECGD and the company."—[Official Report, 18 December 1989; Vol. 164, c. 23.]
I hope that the Opposition will accept that that is perfectly reasonable.
They have spoken about the need to support British exporters and that is one aspect of that need. On Second Reading, my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh)—the Under-Secretary of State for Industry and Consumer Affairs—reiterated what my right hon. Friend said. The terms and conditions on offer to the staff will be one factor that the Government will take into account in assessing the bids. I should expect the terms and conditions on offer to staff transferring to the new company to be at least as good as those that they enjoy now.
It is not unreasonable to expect staff to transfer on a permanent basis, because it is only by doing so that they would demonstrate the commitment to the business that we would expect the purchaser of the Insurance Services Group to show. Anyone who considers the position will recognise that if staff were able to walk out of the business at any time in the first two years for whatever reason—or for almost no reason—an effective organisation could not be built up. It would make the business's position extremely uncertain and would damage the interests of exporters.
Amendment No. 9 suggests that everyone who transferred to the new company would do so on secondment. That would be an unsatisfactory position not only for the company and for exporters but for the Government. One would not know how many people—if any—would want to come back. One would hope that

there would be none. Such a possibility would be uncertain and unsettling. If many people exercised that option. it would be difficult to find them employment.
Both hon. Members for the various bits of Cardiff—the hon. Members for Cardiff, West (Mr. Morgan) and for Cardiff, South and Penarth (Mr. Michael)—implied that people would want to stay in Cardiff. However, there are not many jobs available at any one time in the civil service in Cardiff.

Mr. Morgan: To cope with what I anticipated would be the Minister's reaction, I split the staff into three categories. Much of what the Minister has said does not apply to one third of ECGD staff who have common skills which could be used in other branches of the public service. They include administrative, personnel, establish-ment and finance staff who are not specialists in insurance.
The second group of whom the Minister has failed to take note, although I tried to draw his attention to them, is the one quarter of staff at ECGD-ISG in Cardiff, half of whom are in executive and administrative positions, who joined ECGD in London. They were persuaded to move to Cardiff in the public interest on civil service terms. They might say, perfectly reasonably, "I accepted a move down to Cardiff in 1978 because I was persuaded that it was good for me, as a civil servant, to move in the public interest and on public service terms. If I am not going to work for the ECGD as a civil servant I would rather move back to London. I was never completely sold on the idea of coming to Cardiff, so given that it will not be a civil service ECGD, I may want to move back to London because that is where my mother, brother and sister live." Does not the Minister accept that it is perfectly reasonable for people to feel like that? They were willing to accept a move in the public interest, but they are not willing to accept the move if they are not civil servants.

Mr. Sainsbury: Having heard the hon. Members for Cardiff, West and for Cardiff, South and Penarth speak at some length on the merits of Cardiff, I am astonished to hear the hon. Member for Cardiff, West suggest that there could be even one person who would want to leave Cardiff for anywhere else. However, it is a possibility. Equally, staff might not wish to leave the town in which they work and I am sure that the hon. Gentleman will be familiar with that position. It can create considerable difficulties in finding alternative employment. The objective will be to avoid a position in which redundancy may occur. However, amendment No. 9 would make that more rather than less likely. We would not want to have to make people redundant because its provisions were included in the Bill.
I appreciate the understandable concern that the hon. Members for Cardiff, West and for Cardiff, South and Penarth have shown for their constituents, but they must take into account the reasonable needs of the staff and the Government's assurance, which I repeat, that the terms and conditions on offer to staff will be one factor which we shall consider when assessing the bids because we are aware of the value and importance of the staff, and of their skills and the importance that is attached to them by exporters. In the light of that, I urge the hon. Member for Cardiff, South and Penarth not to press the amendments. They would not be in the overall interests of the staff, of exporters or of the continuing, privatised Insurance Services Group.

Mr. Michael: I assure the Minister that on occasion, family reasons may lead people to leave even the delights of Cardiff. That is a rare occurrence and is not to the detriment of our fair city.
My hon. Friend the Member for Cardiff, West (Mr. Morgan) and I represent some parts of Cardiff, but two Cardiff constituencies are represented by Conservative Members. We sincerely hope that that will be the case for only a short time longer. I point out to the House the failure of those hon. Members to be present for this debate. Clearly, they are not here to support the Minister, but neither are they here to support the interests of their constituents, as we seek to do. As both of them are in the House at present, it is sad that they are not in the Chamber to participate in or at least to listen to our debate. I express some surprise at that.
The Minister quoted the words of the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) with surprising approval. It is clear from the right hon. Gentleman's words that people's wishes come second to the interests of the business. That may be the way in which the Minister seeks to run the public service, but I do not think that it is right. I believe that one has to take people with one in attempting to build a good service.
The Minister referred to the importance of the calibre of staff. I am glad to know that the Minister has heard as many tributes as we have heard to the calibre of the staff now working for ISG. The Minister has confessed that he wants them to transfer even if it is against their will. That would take away choice. It is clear from the Minister's response that the Government are against choice. The motivation of staff is important, as is their ability. Clearly, the Government do not have the confidence in their own proposals to depend on persuasion to take people into the privatised company which they wish to create. What happened to the free market? It is not free for individuals who have given their lives to the public service; it is not free for employees.
I referred earlier to a question that I put to the Minister of State, Privy Council Office. I asked him whether he would make training opportunities and career development opportunities available to people within the Insurance Services Group so that they could, if they wished, fit themselves for jobs in the public sector and thus stay within the civil service. I did not receive a positive answer. We have had today a far from positive answer to the interests and concerns of people within the civil service whose careers and prospects may be damaged by this measure, which should carry a Government health warning.
At this stage, we will ask leave to withdraw the amendment. I am certain that our proposals will be discussed further in another place and I am also certain that civil servants, not only within ISG but generally, will have heard the Minister's sad message in this short debate. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Cousins: I beg to move amendment No. 5, in page 5, line 28, at end insert—
'(4A) 'A scheme under this section shall make provision for the functions so transferred to be made available through services in each standard planning region of the United Kingdom.'.

Madam Deputy Speaker: With this it will be convenient to take amendment No. 27, in clause 10, page 6, line 39, at end insert—
'(c) transfer any shares held on behalf of the Crown in any vehicle company unless he has made provision for that vehicle company or its subsidiaries to continue to operate through a regional network which assures an office in each standard planning region of the United Kingdom.'.

Mr. Cousins: The amendments are an attempt to secure within the privatised part of ECGD, which is the main subject of the Bill, a strong and continuing commitment to a regional organisation. When the need to retain a regional organisation in the project group was discussed in Committee, the Minister spoke about the continuation of regional offices in the part of ECGD that is to be privatised. He said:
After privatisation the regional offices will be the responsibility of the new owner of the insurance services group. They will be committed to providing a first-class service to the customers. I suspect that their judgment will be, as it has been, that the regional office network is an important part of providing that first-class service. We cannot, however, commit them by writing it into the Bill, as they will not be part of the ECGD, what regional offices they will have. I am convinced that they will wish to keep a close contact with their customers, because that is a good way to do business."—[Official Report, Standing Committee H, 7 February 1991; c. 96.]
The Minister emphasised the importance of retaining regional offices for the short-term work of the ECGD. The purpose of the amendments is to ensure that the network of regional offices remains after privatisation.
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The present network of regional offices, of which there are nine, does not extend to each of the standard planning regions of Britain, but the amendments would ensure that there was a regional office in each standard planning region, alongside the regional offices of the Department of Trade and Industry.
It is obvious from the annual reports of the ECGD and from elsewhere that answering the flood of inquiries is an important part of the work of regional offices. The Minister referred to the importance of people being able to seek advice and information from regional offices. The hon. Member for Surrey, North-West (Mr. Grylls), who has considerable knowledge of small and medium-sized business, mentioned the importance of a one-stop shop where advice on export credit insurance could be given. The purpose of the amendments is to ensure that the network of face-to-face contacts in regional offices continues.
Regional offices deal with many inquiries, most of which relate to the short-term work of the ECGD, the part which will be privatised. That emphasises the importance of the amendments. About 250,000 inquiries are dealt with by those nine regional offices, which are important because they offer advice on export credit to small and medium enterprises that may be exporting for the first time.
The Government increased the grant of the Northern Development Company by almost 30 per cent. this year. That company made it perfectly clear to me that when it sets up a trade mission or receives an inquiry from a small company it is essential that it can immediately refer that business to an easily accessible regional office where face-to-face advice can be offered. That is particularly important in regions of Britain where, for historical reasons, small and medium-sized enterprise is not playing


the part in the economy of those regions that it should. The growth of those small and medium-sized enterprises does not depend solely on the passing of the amendments, but were they passed it would be an important assurance to those enterprises that a one-stop shop in their region will be able to deal with their inquiries and that they will be able to continue to rely on somebody being at the end of a telephone or in an office to deal with their complicated problems.
In Committee, the Minister said that he expected those arrangements to continue. Surely it is not too much to ask him to accept the amendments and ensure, rather than expect, that that network of regional offices survives.

Ms. Quin: Before the Minister replies, I should like to say a few words in support of the amendments.
Earlier, we spoke of sending signals to exporters, but we must consider the importance of sending signals to the regions on the privatisation of ISG. In Committee, we tabled an amendment to ensure that the regional network of offices continues. The Minister said that that was not necessary because the project business of the ECGD is best located in London and that exporters had become used to that system. We said that we were asking not for a huge organisation to be set up in the regions but for the contact point that my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) suggested.
The amendments refer to the Insurance Services Group, which shortly will be privatised. We are concerned about the likely service to the regions. We should be interested to hear whether the Minister intends to ensure that the services of the privatised ISG are properly available in all parts of the United Kingdom.
The principle of regionalisation and regional access to services figures highly in the Labour party's policy review document. The regionalisation of the services of the Department of Trade and Industry, including the ECGD, and the availability of regional services, even if they are in the private sector, are important to our chances of economic success. Perhaps it is no coincidence that the Opposition Members who considered the Bill in Committee represent constituencies outside the south-east and therefore understand the importance of regionalised services.

Mr. Sainsbury: Labour does not have many Members of Parliament in the south-east.

Ms. Quin: That is true, but we have an even spread throughout the rest of the United Kingdom, with representation from Scotland, Wales and the north, and we were all concerned to ensure a balanced regional structure.
Despite the good efforts of the ISG, the present balance of regional offices is not satisfactory. We pointed out in Committee that there are not offices in every standard planning region, which is why the amendments, and the amendment that we moved in Committee, specifically refer to the standard planning regions. We are worried that the spread of offices could be worse after privatisation, which is why we believe that this point is so important.
I am sure that the Minister is aware that export activity is not evenly spread throughout the United Kingdom. I am sure that he has seen the recent survey of exporters carried out by Barclays bank—it appears in its second quarterly survey—which shows a variety of export activity from one region to another. In particular, some of the older

industrial regions, which are dear to the hearts of many of us on this side who served in Committee, do not have as much export activity as other regions. In the survey the export ratio of the old, industrial, English regions of the north, the north-west, Yorkshire, Humberside and the east and west midlands was below average. I wonder whether the Minister has examined those figures closely and drawn any appropriate lessons from them.
The figures are important as they show that priority needs to be given to Government efforts, including those of the ECGD and, I hope, the privatised Insurance Services Group, to improve the export services to firms in the regions. That will encourage to export firms that may previously not have thought of exporting. I am sure that the Minister will appreciate that, even if only 10 per cent. of the firms that do not export decided to do so, it could make a dramatic difference to our trade balance. We want to ensure that all measures are taken, including measures for the regionalisation of the ECGD and the privatised ISG, to enable would-be exporters fully to take advantage of the export opportunities which may be open to them. For all those reasons, I strongly support the points made by my hon. Friend.

Mr. Sainsbury: I fear that the amendment reflects both a continuing misunderstanding of, or perhaps a reluctance to consider, how private industry operates and the long-established, always recurring phenomenon of Labour party interference with, intervention in, and excessive regulation of the private sector. In this case, the amendment would lay down where a particular company should have its operations.
The Labour party ignores how the private sector works. It assumes that a private company has no regard for the interests of its customers and that in a mysterious way it can make profits without either having or attracting customers. I assure the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins), as I had to in Committee, that that is not how private industry works. It succeeds by satisfying its customers and giving them what they want. It seeks to do so continually and is in general a great deal more successful, more flexible, and faster to change and respond to customer needs than nationalised industries. That is one of the many reasons why privatisation has been so successful.
The way in which the amendments have been proposed reflects a failure to appreciate the relationship between an exporter and a regional office of the ECGD. We should not object to—indeed, we should welcome—any exporter who called at a regional office, but regional offices are more a base from which ECGD members of staff visit exporters than the other way round. The large number of inquiries to which the hon. Gentleman referred are largely by telephone or, these days, by fax. It is not as if many people are queuing at the door wanting to make export inquiries when the office opens in the morning. That is not what happens.
We share at least one objective—the wish to help and encourage investors—but there are many better ways to do so than by trying to regulate in statute where and how many regional offices the privatised insurance services business should have. As I said in Committee, I am confident that the new owners of the ISG will wish to keep a network that reflects both its needs and those of its


customers, and developments in business communica-tions. I hope that hon. Members will at least recognise the speed at which business communications have changed and are likely to continue to change.
It would be unreasonable and unhelpful to impose on a private company—which, incidentally, is in competition with other private companies—a statutory requirement about where it should have its regional offices, and how many there should be. The regional offices and their staff will be among the assets transferred on the privatisation of insurance services. The present locations are of long standing. They were chosen to provide a balance between the needs of insurance services customers for local service and contact, and the costs of running a widespread regional network, which would have to be funded by the premiums paid by exporters.
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The regional office network has never been entirely consistent with the United Kingdom standard planning regions and there is no particular reason why it should be so. The factors determining the locations are not regional in the sense of standard planning regions, but relate to the needs of customers and the balance between the costs of the network, the methods of contacting customers, the modern communications used and what assessment is made by the new owners of the base from which they wish to send out their representatives to contact customers.
I urge the House to reject the amendments which, once more, show a failure to understand private business. They would unnecessarily interfere with and intervene in such business, certainly not to the advantage of its customers.

Mr. Cousins: The Minister's answer is both curious and disappointing. It is curious because it substantially concedes the case that we are trying to make. In view of his remarks in a previous debate this afternoon, the Minister could not seek to deny the value of the regional offices. Nor did he seek to do so in his reply. It is clear in his mind that those regional offices deal with large numbers of inquiries and provide an extremely important counselling service. They undertake effective missionary work regarding the promotion and encouragement of exports, particularly among small and medium-sized industries, along precisely the lines that my hon. Friend the Member for Gateshead, East (Ms. Quin) described. The Minister does not in any way dispute our arguments about the value of that network of regional offices.
The Minister's speech was curious because he said that we did not need to take any measures to retain the network of regional offices in the arrangements following privatisation. If the offices are as valuable as the Minister concedes, they must be worth preserving. There would be nothing extraordinary or unusual for the seller to ensure that the purchaser undertook to retain a network of continuing activity for a reasonable period. That does not constitute meddling or excessive regulation. It is slightly curious for a Minister from a Department that gave us the Financial Services Act 1986 to deliver lectures about the nature of excessive regulation.
It may be far easier to make a provision in the sale to continue regional offices than to attempt to intervene later by administrative regulation or Government involvement to patch together what could have been saved at the outset by a simple inclusion of this point in the terms of the sale.
If we think that the network of regional offices is valuable, now is the easy moment to preserve and develop it. To return after the disposal of these activities to a private company and attempt to reimpose, rebuild, comment on, criticise, develop and worry about counselling services that may have disappeared so that the only service is somebody sitting beside a fax machine in London will be to act too late. Then the matter will be complicated and will require regulation and unnecessary Government intervention in the work of a private agency. We are now engaged in the process of disposal and this is the simple and right moment to ensure that the network of regional offices survives.

Amendment negatived.

Ms. Quin: I beg to move amendment No. 6, in page 5, line 28, at end insert—
'(4A) The Secretary of State shall ensure that no scheme shall be made under this section without proper and timeous consultations with the relevant trade and exporting organisations and the accredited representatives of the employees' trade unions.'.

Madam Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 21, in page 5, line 31, at end insert—
'( ) A scheme under this section shall contain a provision that there shall be a period of not less than three months, starting from the date of the announcement of the agreed purchase, for consultation and agreement on employment terms and conditions at transfer between the transferee and the employees' trade unions.'.
No. 10 in page 6, line 7, clause 9, at end add—
'(3) A scheme under Section 8 of this Act shall contain a provision that there shall be a period of not less than three months, starting from the date of the announcement of the agreement between the transferor and the transferee, for consultation and agreement on employment terms and conditions at transfer between the transferee and the employees' trade unions.'.

Ms. Quin: The amendments deal with the important issue of consultation with the work force who will be affected by the establishment of the privatised ISG and the conditions under which those consultations should take place.
Amendment No. 6 refers to
proper and timeous consultations with the relevant trade and exporting organisations and the accredited representatives of the employees' trade unions.
Although we believe that consultations with the work force at Cardiff are important, we have also referred in the amendment to the importance of consultations with the relevant exporting organisations. The way in which the Government have proceeded with the Bill has not led to such satisfactory consultations.
Amendment No. 21 refers to
a period of not less than three months, starting from the date of the announcement of the agreed purchase, for consultation and agreement on employment terms and conditions at transfer between the transferee and employees' trade unions.
That is the minimum that should be required. Despite the so-called process of consultation, we are not convinced that there has been any meaningful consultation to allow the views of the work force to be heard. We do not believe that their ideas have been noted and accepted.
Such consultation would be normal in most parts of the European Community. Given that one of the reasons the Government feel the Bill is necessary is as a response to possible changes in export credit in Europe, it would be a good idea if the Government followed the European


practice for consultation with the work force in Cardiff. We know, however, that the Government are opposed to the European social charter and that they do not like the idea of being obliged to consult employees, or to take their views into account. Presumably that explains their attitude to the privatisation of ECGD.
Amendment No. 10 also refers to
a period of not less than three months … for consultation and agreement on employment terms and conditions".
We believe that the discussions between the Government, the trade unions and the employees who will be affected must be wide-ranging to cover all the various terms and conditions that will obtain at transfer.
Some of those terms and conditions will be the subject of later amendments and I know that the issue is also likely to be considered in another place when the Bill is subject to further discussion. However, we make no apology for referring to consultation and agreement now, as they are of vital concern to the employees who will be affected by the transfer.

Mr. Sainsbury: Since the outset of discussions leading to the proposal for privatisation, ECGD has been careful to involve and consult interested parties, and that includes the staff, their trade unions and the relevant exporting associations. I am surprised at the suggestion of the hon. Member for Gateshead, East (Ms. Quin) that there have been no such full and comprehensive consultations with the trade unions and individual members of staff. That suggestion is contrary to the facts.
Before the decision to privatise was taken, Mr. Kemp received comments from all interested parties during his review, as did the inter-departmental working group of officials set up to study the options in the Kemp report. Those interested parties included trade unions. Major exporters and exporting organisations submitted their views to the Select Committee for Trade and Industry when it examined the future of ECGD. Numerous written representations have been taken into account. The trade unions also submitted evidence to the Select Committee through the Council of Civil Service Unions.
Since the intention to privatise ISG was announced on 18 December 1989, the trade unions have been kept informed of developments and have had numerous opportunities for making their views known to ECGD's management at meetings of the department's Whitley committee and its sub-committees, including a special sub-committee relating to privatisation issues, which meets monthly.
The hon. Lady will be aware that there have already been an exhaustive number of meetings. From time to time, there have also been meetings of the management and the chairmen of various sub-committees dealing with particular aspects of the privatisation. The topics covered in those meetings include personnel records and preliminary staff projections for the new company as well as for the proposed organisation of ECGD post-privatisation. I assure the hon. Lady that ECGD's trade unions will continue to be fully consulted as required by TUPE—Transfer of Undertakings (Protection of Employment) Regulations 1981.
All the invited bidders have already met the ECGD trade unions or have arranged to do so. The bidders will be able, if they wish, to have further discussions with the

unions before they submit their bids. The preferred purchaser, when identified, will have the opportunity to have further discussions with the trade unions about the terms and conditions offered.
I cannot, of course, commit the preferred purchaser to any particular approach to those discussions, but the opportunity for them will exist. There should be sufficient opportunity for such discussions before the package of terms and conditions on offer is formally presented to all staff. When that has been done, the staff will be given at least a month to express their individual preferences. I believe that is an adequate time scale and there is no need to specify a different or longer one in the Bill.
It would be unreasonable to include in statute a requirement that the parties involved should reach an agreement on terms and conditions within a set period, whether that meant three minutes, three weeks or three months.
I agree with the hon. Lady about the importance of full and proper consultation, and that is exactly what has already taken place. Therefore, the amendments are unnecessary and, insofar as they suggest that there should be a period of not less than three months for consultation starting from the date of the announcement of the agreement, they would be unhelpful and would lead to uncertainty and difficulty not only for the staff, but exporters. I had hoped that it remained the hon. Lady's view that we should provide good assistance to exporters rather than make their job more difficult.

Mr. Michael: It is not adequate to quote in support of consultation with staff consultation and comment on policy to a Select Committee in response to the Kemp report. That is no substitute for proper consultation on the current details of the way in which the privatisation will affect staff.
To date there has been no meaningful consultation with ECGD trade unions by the management departments. That is illustrated by the fact that it was necessary to take the case to the central arbitration committee to force the management to release a report prepared by Coopers and Lybrand Deloitte on the terms and conditions and pension right arrangements that are likely to apply to existing ECGD staff who agree to transfer to the newly privatised company.

Mr. Sainsbury: I remind the hon. Gentleman that when that point was made previously I had to point out that the staff had sought the release of that document before it had been prepared. It would have been extremely difficult for Messrs. Coopers and Lybrand Deloitte to hand over a report that had not been completed.

Mr. Michael: The Minister repeats what he said in Committee, but the staff have also repeated their statement since the Minister made that statement. They have repeated that it was necessary for them to take such action to obtain the details of the terms and conditions and pension arrangements that were likely to apply to existing staff. It is surely right that the staff should be given information as early as possible and be fully consulted about it.
The management's intention is as follows: once the purchaser of ISG has been selected, a package of employment terms and conditions will be presented to staff, who will then have one month in which to consider it and to decide whether to join the privatised company or


to remain in the civil service. That does not allow enough time for expert advice to be obtained on employment terms or for meaningful consultation to take place—the more so given the current backlog of items on which consultation and negotiation are needed.
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The Minister has said that he agrees with the Opposition on the need for consultation. Sad to say, such words come easily, but staff are still not to be given adequate consideration during the process of privatisa-tion. If the Minister agrees with us so readily, why does he not accept the amendments? If he is so willing to accept the principles behind them, why does he not accept them in full? The Minister has promised full and adequate consultation with staff at every stage from now on. I ask him to ensure that that happens in practice.

Mr. Sainsbury: The hon. Gentleman asks why I do not accept the amendments. Amendment No. 6 states that
no scheme shall be made under this section without proper and timeous consultation".
Who is to determine what "proper" means? A good reason for not accepting the amendments is that they are far too vague. Apart from the wide-ranging and continuing consultation with the trade unions to which I have already referred, 700 counselling interviews with members of staff have been held.

Mr. Michael: On the second point, the Minister knows about the unsatisfactory answers given by the Department and by the Minister responsible for the civil service. On the first point, the last refuge of a Minister who has lost the argument is to suggest a difficulty in an amendment that would be impossible to resolve in law. The test of what is reasonable is well established in English law, and there would be no problem about testing these points in that way. I seem to remember that in Committee the Minister defended the word "reasonable".

Mr. Sainsbury: The amendment contains the word "proper", not "reasonable".

Mr. Michael: The Minister is quibbling. He is seeking a test of what is reasonable, and if the amendment, including the principles with which he says he agrees, were incorporated in law, the test of what is reasonable would suffice to determine whether a particular course of action was satisfactory. Either the Minister should accept the amendments, therefore, or, given the quality of advice that he has at his disposal, his colleagues in another place should return with fresh amendments to give effect to the principles with which he says he agrees.
We are disappointed with the Minister's response and we shall keep these matters under close scrutiny. How the Minister pursues the undertaking that he has given in this short debate will also be a matter of scrutiny and debate in another place. In the meantime, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9

TRANSFERRED STAFF

Ms. Quin: I beg to move amendment No. 8, in page 5, line 39, after '1981', insert
'and the EC Directive 77/187 (The Acquired Rights Directive)'.

The amendment contains a reference to European Community directive 77/187—the acquired rights directive. We tabled the amendment because we understand that there may well be a discrepancy between the Transfer of Undertakings (Protection of Employment) Regulations 1981 and the directive, under which the TUPE regulations were introduced in the United Kingdom.
I refer the House to article 6 of the acquired rights directive:
The transferor and the transferee shall be required to inform the representatives of their respective employees affected by a transfer within the meaning of article 1(1) of the following: the reasons for the transfer; the legal, economic and social implications of the transfer for the employees; measures envisaged in relation to the employees.
The transferor must give such information to the representatives of his employees in good time before the transfer is carried out … If the transferor or the transferee envisages measures in relation to his employees, he shall consult his representatives in good time on such measures with a view to seeking agreement.
The TUPE regulations only require the employer to inform recognised representatives long enough before a relevant transfer to enable consultation to take place, and they make no reference to seeking agreement.
If the acquired rights directive is not fully honoured on this occasion, would employees in these circumstances have some sort of legal resource? To avoid any move of that sort, it would perhaps be sensible explicitly to invoke the acquired rights directive to cover the transfer of the ISG to a private buyer. By including a reference to the directive, which we have signed, a greater obligation to consult meaningfully with trade union representatives over the transfer would be imposed—an imposition that would include not only consultation but a commitment to seeking agreement between employees and Government over the proposals. That would be an important commitment, especially to the employees at Cardiff. By assuring them that their views are being fully taken into account they would know that the consultation is not just a cosmetic exercise that will not result in any changes.

Mr. Sainsbury: I can assure the hon. Lady that the consultation is far from a cosmetic exercise. It is a full and comprehensive consultation—I have already mentioned 700 individual interviews—involving both trade unions and members of staff.
The amendment is not appropriate. The acquired rights directive requires member states to enact provisions in their own law to give effect to the policy described in the directive. Under Community law directives are binding in effect, but the choice of form and method of achieving that effect is left to member states. The Transfer of Undertakings (Protection of Employment) Regulations 1981—we happily refer to them as TUPE—were the enactment of the directive in United Kingdom law. To apply the directive to the same transactions as those to which TUPE apply would be unnecessary and confusing for anyone trying to determine what his or her position in law was. It would apply two statutory provisions different in drafting style and expression and one of them, the acquired rights directive, was not framed with United Kingdom concepts of law in mind. It was not designed directly to operate in the context of the United Kingdom's legal system. The result would be increased uncertainty and possible doubt about the law.
Having chosen to implement the acquired rights directive by means of TUPE, it is doubtful whether it


would be in accordance with Community law to try to implement it again in relation to a specific transaction to which TUPE would also apply. If we did that, we could be accused of avoiding the choice of a formal method, which is required under Community law. The amendment would injure the interests of ECGD staff by creating confusion about their rights. I urge the hon. Lady to withdraw the amendment and to stick to TUPE, which enacts in United Kingdom law the requirements of the acquired rights directive.

Mr. Morgan: The Minister tried to dodge the entire issue by claiming that TUPE is the British style enactment of the acquired rights directive. He must be able to demonstrate that the 1981 TUPE version of the 1977 acquired rights directive is relevant to 1991. In their 11 or 12 years in office, the Government have tried to cut this country away from the entire general drift of industrial relations provisions for consultation on major changes in employment by large firms. They have tried to cut Britain adrift from Community legislation on employment and from the social charter.
There is an interesting and relevant item in The Independent this morning relating to the Government's problems on this issue. It shows that in 1991 this issue is still a burning topic. It is not enough to say, as the Minister has said, that TUPE incorporates the necessary legislation. If that is true, why was it necessary for the right hon. Member for Bath (Mr. Patten), the chairman of the Conservative party, to write on the topic to Wilfrid Martens, the chairman of the Christian Democrat Federation? The Independent seems to have acquired a copy of the letter which relates to the application by the British Conservative group in the European Parliament to become members of the Christian Democrat group. A typical Christian Democrat would have accepted our amendment straight away because it incorporates the latest and most up-to-date thinking about what employees deserve by way of consultation rights. The Government will not accept the amendment because of the current battle for the soul of the Conservative party.
In his letter, the right hon. Member for Bath said that Britain supported
'a social dimension to the social market"".
Many Conservative Ministers, including the two who are in the Chamber, would find that deeply offensive and contrary to their fundamental beliefs. The letter speaks of a social dimension,
that takes into full account the criteria agreed at the Madrid European Council in June 1989.
It refers to the principle of job creation and recognises the principle of subsidiarity. I cite that letter in the context of the struggle for the soul of the Conservative party. Under the acquired rights directive or any legislation dealing with rights acquired or given to employees in any kind of transfer from the public to the private sector or, as is more common, during a takeover within the private sector, do the employees of a large enterprise have any right to be consulted?
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Most Conservative Members who are present in the Chamber think that such employees should not have any rights at all, but they are obliged to give them some under European directives because the Government need to

ensure that they can hang on to the people that they need to make a success of the transfer. The Minister said that British law in 1981 covered the 1977 acquired rights directive, but we need to know his interpretation for 1991 and beyond. Given what has happened in the past 10 years, is that the last word on acquired rights?
More time should be given and we should make more use of formal trade union negotiating machinery. Will everything be done without reference to the formal negotiating rights of the Whitley council and the civil service trade unions? The Government like to bypass the trade union negotiating machinery so that they can pick people off one by one using special offers. They want to be able to make transfers to the private sector with as little consultation and trade union bargaining machinery as possible. We want from the Minister a bit of honesty about what the Government are playing at in seeking to effect a transfer with the minimum of acquired rights. People in Britain should have maximum acquired rights in the same way as people in other European countries.

Ms. Quin: I should like to reinforce some of the points made by my hon. Friend the Member for Cardiff, West (Mr. Morgan).
The Minister rightly said that European directives provide a framework for national legislation which is enacted in detail. However, there can be legal challenges if it is felt that a country has not satisfactorily implemented a directive. There have been legal challenges on many directives, such as the directive seeking to ensure equal opportunities for women in the workplace and the equal treatment directive. It has been claimed that the United Kingdom has not properly implemented directives. Surely it would be possible under the acquired rights directive to have such a challenge.
The Minister said that, basically, we are debating two different statutory provisions—the acquired rights directive and the TUPE regulations. Is not it the case that, when the subject area is the same, the EC directive can override national legislation? In any legal dispute, the European directive has precedence over national regulations. Therefore, the two matters are not quite as separate as the Minister gave us to understand.

Mr. Sainsbury: As I think I said, the Transfer of Undertakings (Protection of Employment) Regulations date from 1981. It would be possible to challenge whether they effectively implement the acquired rights directive, but they have been in place for 10 years and no such challenge has been made. I have not heard anyone suggest that they fail in any way satisfactorily to implement in United Kingdom law the acquired rights directive. It would be confusing to try to include the acquired rights directive as well as TUPE, which is the method of implementing that directive in United Kingdom law. TUPE takes account of our legal concepts but the acquired rights directive does not.

Ms. Quin: The Minister has admitted that a legal challenge is possible. In any dispute between the TUPE regulations and the acquired rights directive the directive will be dominant. His reply confirms our wisdom in tabling the amendment. The issue is complicated and there are many different aspects to consider. Rather than pressing the amendment to a vote—I imagine that it will be examined in the other place—I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10

VEHICLE COMPANIES

Mr. Sainsbury: I beg to move amendment No. 20, in page 6, line 42, leave out from beginning to 'and' in line 43 and insert
'or any person acting on behalf of the Crown has a legal interest in them'.
This is one of those celebrated technical amendments which, I am happy to say, we have not come across quite so often in the Bill as we sometimes do in other legislation.
Clause 10(4)(a) is designed to ensure that any shares in a vehicle company which are contracted to be sold to the purchaser of the Insurance Services Group before those shares are created and issued are treated as a Crown holding for the purposes of subsection (4) of clause 10. That requires all the shares in a vehicle company to be held by the Crown as a condition of the Secretary of State acquiring any shares in it or making loans to it. If the shares are contracted to be sold before they are issued, there is concern that the purchaser might be treated as the beneficial owner of the shares and they would not, therefore, qualify as a Crown holding.
The amendment redrafts the subsection to cover the normal practice whereby shares, which are sold or transferred soon after issue, are often issued and registered in the name of a nominee for the vendor, usually his solicitor or accountant, before they are transferred to the purchaser. The amendment ensures that a temporary holding of shares in a vehicle company by one of the Secretary of State's advisers, following the practice that I have described, will rank as a Crown holding for the purposes of subsection (4) of this section.

Amendment agreed to.

Mr. Michael: I beg to move amendment No. 29, in page 6, line 46, at end insert
'(6) A vehicle company under this clause shall have its headquarters located within the Cardiff area. For the avoidance of doubt, this subsection shall apply to the initial and to any subsequent transfer.'.
The amendment seeks to ensure that a vehicle company shall have its headquarters located within the Cardiff area. It also states that, to avoid doubt, the subsection should apply to the initial and any subsequent transfer.
I hoped—I know that my hon. Friend the Member for Cardiff, West (Mr. Morgan) shares my hope—that all four Cardiff Members would be here to argue that that source of major employment should remain in the Cardiff area. I recall that in Committee we discussed the importance of Cardiff to the Export Credits Guarantee Department, although not on this amendment—the reasons for that will be clear in a moment. In responding to that debate, the Minister—who unfortunately is not with us now--made several comments which were helpful to the case made by my hon. Friend the Member for Cardiff, West and me. He said:
I see no reason why the new company should wish to move from Cardiff where it has operated more successfully during the past 10 years than at any other period in its history.
That is a correct reference to the encouragement that the department was given on its arrival in Cardiff and throughout the period since then. The Minister went on to say:

None of the organisations that has expressed an interest in owning the company and bidding for it has suggested moving from Cardiff.
However, he also said that
the ultimate location of the privatised company must remain a decision for the management and owners of that company.
That is not the case. There is no "must" about it. It is the Government's choice to leave that liberty in a way that they do not seem, from today's debate, interested in doing, with the employees of the department. It is perfectly proper for the Government to accept the amendment and to ensure that the employment of those people stays within the Cardiff area.
When the Minister summed up his remarks in that debate, he warmed to his theme. He almost waxed eloquent, saying:
What are known as campus offices on the edge of town —they are spread out and provide good parking facilities— are often attractive. They may be just beyond the city boundary, yet be the most convenient place to which to attract staff. It would be inappropriate to include the amendment because it would be binding for ever."—[Official Report, Standing Committee H, 6 March 1991; c. 346–47.]
Our amendment in Committee sought to limit the location of the headquarters of the privatised company within the boundaries of the city of Cardiff. In putting forward our amendment today, we have helped the Minister to accept our amendment. Clearly, he understood the principle upon which we based our argument in Committee. The amendment states:
A vehicle company under this clause shall have its headquarters located within the Cardiff area.
There is no difficulty with that in English law—I use that phrase advisedly as I believe that we are not allowed to speak of Welsh or British law—because the test of what is reasonable comes in. For instance, it would not be within the Cardiff area were the headquarters to be relocated in Glasgow. It would be in the spirit of the amendment were the company to be relocated a short distance outside the boundary of Cardiff in south-east Wales, from which employees are now drawn.
The arrival of the Insurance Services Group and the employees of the Export Credits Guarantee Department in Cardiff was not an accident. It was a choice to bring such employment to the area, as we in Cardiff suffered the effects of high unemployment and of the closure of some of our heavy industries. The gradual build-up in which some of us participated—my hon. Friend the Member for Cardiff, West was involved in economic development and I was very much involved in those spheres in local government—encouraged the development of financial services and modern forms of employment within the Cardiff area. It would be a sad day were that employment to drift away from Cardiff.
The amendment seeks to make the Government recognise the validity of the Minister's words in Committee. They should recognise that it is reasonable for employees to be reassured that their jobs will remain in Cardiff, to recognise that it is reasonable for private companies bidding for ISG to be on a level playing field, knowing that the headquarters will be required to stay in Cardiff, and to have the matter dealt with once and for all.
Having taken to heart the Minister's comments in Committee, I hope that the Under-Secretary of State for Industry and Consumer Affairs, who, during the Committee proceedings, seemed to have taken a vow of Trappist silence, will respond with enthusiasm and will accept the amendment. That would be in the interests of


the service that will be provided, the stability of staff and the security of the future of the privatised company. We do not seek to move the ISG into the private sector, but, if it must go there, we want it to be stable so that it continues to provide the service to exporters in which the Government seem to have less interest than ourselves.

Mr. Morgan: I shall merely add a few words to what my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) said. He mentioned the principle that we are required to comply with English law. If we were writing the legislation in compliance with the principles of Welsh law, the amendment would read:
A vehicle company under this clause shall be garaged within the Cardiff area for the sake of the lower insurance rates.
However, we cannot do that, but must stick to the turgid language to ensure that the legislation provides, and continues to provide, 700 jobs in the Cardiff district.
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Ministers have said 50 times if they have said it once that the Bill deals with the retention in the business, but under different owners, of the 700 people who live in Cardiff and the immediate surrounding commuting district who have provided high-class service to exporters since the business was transferred to Cardiff from London in 1977, leaving the project group in London. Originally, there were some doubts among people who said that there would be loss of face-to-face contact and talked of the greenness of the local labour force when they were hired rather than staff being transferred from London on civil service terms. It was questioned whether local people would have the experience of the financial services industry and the specialised forms of insurance. People asked whether they would pick up the skills. They did pick them up and have continued to provide a high-class service.
As there is easier recruitment in the south Wales district, everyone is more than satisfied with the results. The employees are satisfied because they have, effectively, had a higher standard of living through lower house prices. The exporters are happy because there has been greater commitment to the job—perhaps because there is less choice of employment and people pitch in that little bit extra and yield that extra commitment to the job because they know it really counts in south Wales, whereas such jobs in the London district might be ten a penny, given the proximity of the City.
Those people deserve not to be messed about—one could say, not to be messed about for a second time in less than 15 years—simply because the Government want to effect a transfer of ownership out of the public sector into the private sector, so is effectively putting jobs and careers on the auction block without guarantees about what will happen afterwards. That is particularly true since we now learn that one of the bidders on the list of the half a dozen presented to us in that peculiar hole-and-corner fashion in the closing days in Committee has dropped out. Now, three of the bidders are foreign and two are British.
Therefore, there is now more than a fifty-fifty chance that employers may well finish up working for a non-British private sector company. That naturally increases their fears that a company based in Belgium, Amsterdam or Trieste may want a base in London, where much of the private insurance is located. Such foreign

companies might not see the advantage of continued employment in Cardiff in the way in which a British company would because it would know the difference in supply and demand for labour in the financial services industry in Cardiff compared to London. Such advantages might not be so readily apparent to the majority of the bidders—three out of five of them come from other European countries. One way to overcome the natural fears of people in the Cardiff district, try to smooth the transfer and make the Government seem less hard-hearted and utterly ruthlessly ideological in their approach would be to write in a guarantee clause to show that the Government will bind the successful bidder to the continuation of the operation in Cardiff.
As my hon. Friend the Member for Cardiff, South and Penarth said, the Minister said that he agreed with us in spirit but did not like the wording because it was too specific as to the city of Cardiff and its boundaries. He does so all the time; whenever we propose any amendment, he says that he would love to be able to help us, agrees with us 100 per cent., but our wording does not do the trick and will cause all sorts of doubts and complications. We have come up with a wording that overcomes those difficulties, but I know that he will refuse the amendment. We have heard weasel words from start to finish. The Committee stage was full of weasel words from the Minister—as is the Report stage. As we have a change of Minister, will the hon. Gentleman for once try some badger or frog words —any words but weasel words—and give some reassurance to the 700 employees whom we represent in the absence of the two Cardiff Conservative Members of Parliament?

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): I am grateful for the comments of the hon. Members for Cardiff, South and Penarth (Mr. Michael) and for Cardiff, West (Mr. Morgan). However, I have to disappoint them tonight because the privatised company's ultimate location must remain a decision for its management and owners. To place on them such a restriction would inhibit their freedom to manage the business as they see fit, and would be likely to prejudice the sale prospects and the proceeds. It would certainly be a most unusual, if not unique, restriction on a commercial company. I say that in answer to a point made by the hon. Member for Cardiff, South and Penarth. Presumably it would be possible to put such a suggestion in a statute, but it would be most unusual, if not unique, to do so.
Subject to the owner's views, the present insurance services management intention is that the company's headquarters should remain in the Cardiff district. I see no reason why the company would wish to move away from a location where it had operated so successfully for 10 years—indeed, from where it has operated more successfully than ever before in its history, and where costs are considerably lower than in other areas, especially the south-east of England. That must be the answer to the argument advanced by the hon. Member for Cardiff, West.
In any service business such as the Insurance Services Group, the staff are its major asset. It is a pleasure for me to reiterate the praise heaped upon the staff of the ISG by the hon. Member for Cardiff, West. It is the understanding of the members of that staff of the needs of exporters and


their knowledge of overseas markets that exporters are selling on which the business is built. That is the primary strength of the business.
In the past few years there have been significant improvements in the speed of the service that is provided to the ISG's customers. That has been brought about by the use of new information technology systems. As hon. Members will know, the full benefits of these systems are realised only with a fully trained work force of the type that is to be found in Cardiff. It is testimony to the skill and dedication of the ISG staff that more than 80 per cent. of credit limit applications from overseas buyers are processed within 24 hours. It is difficult to imagine any reason the owners of the new company could have for risking their most important asset by moving their operations away from the Cardiff area. None of the organisations which has expressed an interest in the possibility of owning the company has indicated any wish to move from Cardiff.
An amendment with a similar intention behind it to that which we are now discussing was moved and debated in Committee. I have taken the opportunity to re-read the report of the debate, and I refer to columns 345 to 349 of the Hansard report of the Committee's ninth sitting. That amendment was withdrawn after a full discussion, and reference has been made to that discussion this evening. It was said in that discussion that ultimately these are matters for management to decide and are not appropriate for statute. I return to the original contention that it would be almost unique to decide such matters by statute. I hope that Opposition Members will feel able to withdraw the amendment.

Mr. Cousins: Having listened carefully to the Minister, I ask him to clarify, both in the context of Cardiff and elsewhere, what the Government's policy is towards the disposal of the property assets in which the Export Credits Guarantee Department is based. The assurance that he has given about the future of the department at Cardiff would be greatly reinforced if it were known that the property assets in which the activities are located will form part of the sale.

Mr. Leigh: The main property is held on lease. Nothing that I have said affects that. The hon. Gentleman, as a member of the Committee that considered the Bill, will know that there has to be a move from the present offices. That is accepted. I think that it has been made known locally that the move will take place and that a period of grace of three years has been given to the ECGD. We are not looking for any instant moves. It is clear that the department will have to move from its offices, and nothing that I have said affects that.

Mr. Cousins: Perhaps the Minister will let me know later, if not now, what the policy is on the disposal of the property assets in which the department is situated.

Mr. Leigh: I do not think that that issue is relevant to the debate. We are discussing whether the location of the company should be in the Cardiff area. I have heard what the hon. Gentleman has said, as has my hon. Friend the Minister of State. If we can provide him with further elucidation by letter, we shall do so.

Mr. Michael: Perhaps I can help by referring to the generosity of Cardiff city council in working to keep employment within the city by relaxing covenants, as the

Minister has said, despite the council's opposition to the privatisation, to allow the privatised company time to find a new location within Cardiff or the immediate area.
I think that I begin to understand why the Minister kept quiet in Committee. He was almost over-enthusiastic in replying to this debate. Tributes to Cardiff, to the department's staff and to improved services were building up to a crescendo. There were references to skill and dedication to the extent that we thought that the hon. Gentleman was about to accept the amendment. Unfortunately, he let us down in the end.
Just as the Minister sought an excuse in Committee for not accepting the amendment, he has not accepted the amendment today, even with the obstacle which his hon. Friend identified removed from it. We are sad because the amendment which we debated in Committee was withdrawn on the basis that the location could not be limited so tightly within the city boundary. That is why we have come back with this constructive amendment tonight. It is clear that the Government do not intend to accept it, even in the spirit that was demonstrated in Committee. We were offered merely words, not a real promise to retain the headquarters in the Cardiff area.
I am sure that I can speak for my hon. Friend the Member for Cardiff, West (Mr. Morgan) in saying that the attractions of Cardiff as a location and the quality of the staff there are strengths on which we can depend. It is unfortunate that the Government have not sought to turn that good chance into certainty. With sadness, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ms. Quin: I beg to move amendment No. 12, in page 7, line 9, at end add—
`(8) The Secretary of State shall not dispose of any shares in or securities of a vehicle company unless the purchaser of such shares or securities has given an unequivocal and binding guarantee to the Secretary of State that the purchaser will at all times operate with the objective of encouraging or facilitating, directly or indirectly, the supply by persons carrying on business in the United Kingdom of goods or services to persons carrying on business outside the United Kingdom.'.
The amendment places on the new privatised company an obligation to operate with the objective of encouraging or, if appropriate, facilitating directly or indirectly the export of goods and services. The Minister will remember that in Committee we expressed our great anxiety over the fact that the commitment to encourage exports that appeared in the earlier Bill was not repeated in this Bill. We discussed that commitment to encourage exports in relation to the continuing ECGD.
We feel that it is important at this stage to ascertain from the Minister whether the newly privatised company will have a statutory commitment to encourage exports. I imagine that the Minister will say that the new privatised company will obviously want to promote and encourage exports. None the less, he will be aware that exporters were worried that the phrase "encouragement of exports" was omitted from the Bill. They will wish to be assured that both the continuing ECGD and the privatised ISG will have a strong commitment to encourage exports.
In Committee we had an interesting discussion about the relative strengths of the words "facilitate" and "encourage". The Minister will see that the amendment contains both expressions so that there can be no doubt about the extent of the commitment of the new company to promoting exports. The amendment would ensure that


ISG is not tempted to turn away business simply because it is not immediately or obviously profitable even though it may lead to good long-term prospects for British industry in overseas markets. We are worried that short-term export credit insurance may not be available for many overseas markets and that export premium costs might rise steeply.
If there is a statutory commitment to the encouragement of exports, the company will have an additional objective to the simple one of dealing with profitable markets. There will be a wider commitment to the health of United Kingdom exporters and the United Kingdom economy as a whole. We would like to hear the Minister's response to the amendment and we hope that he will look favourably on it.

Mr. Sainsbury: The hon. Lady asked for my response to an amendment that is well-intentioned but, as is so often the case with such amendments, so vaguely worded that, were we to include it in the Bill, I do not know how we could ever determine whether a purchaser had operated at all times with the objectives set out in the amendment. I do not know of any criteria or test that one could apply to determine, with sufficient accuracy for something included in a statute, whether a requirement had been met.
There is a much better way to ensure that that requirement is met—I appreciate that it is a way that the Opposition find hard to accept and even harder to understand—and that is competition, which is an effective test of whether a company is providing a good service. If it is not, the customer can take his business somewhere else.
The amendment completely overlooks the fact that the Insurance Services Group of the Export Credits Guarantee Department is already operating in a competitive market. There are other providers, and there is every sign that the number of providers and the degree of competition will steadily increase.
In addition, the commitment to ISG's business and to its existing customers has already been a key factor in selecting the shortlist of those invited to tender. That arose out of earlier discussions with potential bidders. As I have already said, that commitment—not only a commitment but an understanding—and the resources necessary to carry out the work of ISG will be a major factor in determining the final purchaser from the shortlist.
Examination of the shortlist of bidders will confirm that the Government are negotiating with parties who clearly understand the market and are committed to it. I am totally confident that a purchaser, to meet the competition that the Insurance Services Group will encounter, will endeavour to provide a quality of service to its customers that will persuade them to continue coming to the ISG for export credit insurance.
Therefore, privatisation will be good for exporters, not only because of the competitive element but because it will enable privatised business to provide a more flexible service, combining export and domestic credit insurance where that is appropriate. It certainly seems to be required by a number of existing customers.
In summary, one could say that as the amendment is misguided, unnecessary, inappropriate and impractical, it should be rejected.

Ms. Quin: The Minister often criticises our amendments as being too vague or too precise. It seems that we are not able to please him at all with the ideas that we have suggested. I am perfectly well aware of the importance of competition and of market forces. Competition can be healthy and can have a healthy effect. Nonetheless, throughout the passage of the Bill, the Minister has demonstrated the wildly over-optimistic belief that somehow everything will be successfully sorted out by this policy of privatisation and competition. The two may not work in harmony because one of the problems that we mentioned in Committee was that in certain cases privatisation might reduce rather than increase competition. That argument has not been dealt with by the Minister.
We are also aware that the climate in which competition takes place may not always be conducive to balanced economic growth, which explains some of our previous amendments—for example, that on regional networks. Also, within the European Community—our focus with the privatisation of the ISG—there can be many substantiated claims of unfair competition.
Part of the wording that the Minister objects to is already in legislation—for example, that on the encouragement of exports. For that reason, I do not believe that the amendment is as inappropriate or as misguided as he suggests. The evidence shows that exporters have been able to live happily with the wording in existing legislation and so his comments on the amendment are not justified. However, once again I am sure that the importance of encouragement to export will form part of the deliberations in another place. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11

REINSURANCE OF ECGD RISKS

Ms. Quin: I beg to move amendment No. 30, in page 7, line 10, leave out from beginning to 'under' in line 11 and insert
'Any transferee shall be obliged to consent to make, if so requested by the Secretary of State, arrangements with the Secretary of State'.
This is a probing amendment. Clause 11, as drafted, would enable the Secretary of State to establish an arrangement with the privatised company under which it would provide reinsurance for the insurance business underwritten by the ISG before privatisation—in other words, in respect of insurance policies that are still to run off.
We wonder whether a problem might occur if the privatised company refused to reach such an arrangement with the Secretary of State. The amendment is intended to oblige the privatised company to agree to the arrangement, if the Secretary of State wants one. Its aim is really to get at the reasoning behind the wording of the Bill.

Mr. Sainsbury: I understand from what the hon. Member for Gateshead, East (Ms. Quin) has said that we are dealing with a probing amendment. I have noted the number of occasions on which Opposition Members have


asked leave to withdraw their amendments on the ground that they wish to leave further deliberation to another place. A remarkable degree of enthusiasm for the work of the other place seems suddenly to have been generated, and Opposition Members appear to be almost anxious to add to its work load by not taking a decisive view of any of their amendments. None the less, I appreciate that this is a probing amendment.
It may be helpful if I remind hon. Members that clause 11 enables the Secretary of State to transfer to the new company the bulk of the insurance service business that exists on the date of privatisation. The transfer will be achieved through the company providing reinsurance to ECGD in respect of existing and future risks under policies issued by the ECGD after 31 March 1987. Although it will be the reinsurer, the company will continue to administer the risks on behalf of the ECGD, which will remain the primary insurer.
This method of transferring a business is not uncommon in the insurance market, and avoids any complications that may be involved in directly transferring liabilities under insurance policies to a new insurer.
Given the circumstances, the amendment is unnecessary. Furthermore, it would not be appropriate for legislation to dictate the detailed terms of a sale contract that is yet to he negotiated. As has already been made clear, the intention is to privatise the Insurance Services Group as a going concern. The invitation to tender sets out the Government's proposals for an arrangement that enables the bulk of the existing credit insurance business to be transferred to the new group.
The draft new contracts are in the invitation to tender —a copy is available in the Library. They provide a way of putting that into effect. Bidders, however, are not precluded from submitting alternative proposals for consideration. It would be disadvantageous to the sale process if we imposed, by means of the amendment, detailed terms on bidders. Therefore, we should not accept the amendment. It would be better to leave the opportunity for another method of transfer to be accepted, if that should prove advantageous.

Ms. Quin: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Cousins: I beg to move amendment No. 13, in page 7, line 14, at end insert—
`1(A) The Secretary of State shall make arrangements with any transferee under which all companies carrying on business in the United Kingdom for whom the tranferee will provide export credit insurance or similar assistance, not confined to the arrangements set out under section 1(4), shall have the right of access, and the opportunity to make representations, to the Secretary of State in relation to, any aspect, of the conduct and operations of the transferee.'.

Madam Deputy Speaker: With this we may take amendment No. 31, in page 7, line 14, at end insert
'(1A) The Secretary of State shall make arrangements with any transferee under which all companies carrying on business in the United Kingdom for whom the transferee may make available export credit insurance or similar assistance shall have the right of access, and the opportunity to make representations to, the Secretary of State in relation to any aspect of the conduct and operations of the transferee.'.

Mr. Cousins: The amendments are intended to ensure that, if and when the concern is privatised, the range of businesses—many of them small—whose export credit

insurance will be conducted privately will continue to have access to the Secretary of State. The Minister made much of the markets. It is an inevitable fact of life that the markets reflect the power of the various actors in those markets. With the privatisation of the Insurance Services Group, we are dealing, on the one hand, with a very large insurance company and, on the other, with a mass of exporters, many of them small, who rely on that insurance company for short-term insurance. Inevitably, therefore, the power of the markets may work very much to the advantage of the supplier of the insurance facility and very much to the disadvantage of those who depend upon it. That point has been made time and again during the discussion of this issue by bankers and companies, both large and small.
It is significant that the major clearing banks are concerned about that aspect. They are worried that their customers in other parts of the commercial world will become dependent upon a monopoly insurer for that critical part of their business. They are also worried about its consequences for premium rates, the availability of cover for particular markets, access to cover for particular deals, additional conditions that may be imposed, or the withdrawal of cover facilities from certain companies or individuals. That is what may happen if there were a major supplier of an insurance facility and a mass of small to medium-size enterprises that depended upon it.
The amendments would introduce a statutory right of access to the Secretary of State by small and medium-size companies. It must be reasonable, even to someone who is absolutely committed to the workings of the market, that a fail-safe provision should be included in the Bill. A survey into the changes was carried out by the Export Credits Guarantee Department on behalf of the Government. A key question was put to 400 companies in the survey. The Minister will recollect his doubts about surveys, but this one was carried out on behalf of the Government. Those 400 companies were asked whether the proposed change in the ECGD's status to that of a trading company would result in a better service to exporters. The majority had no view to express and did not know what to say. Their doubts about what the future may hold for them would be dealt with by the acceptance of amendments Nos. 13 and 31.

Mr. Sainsbury: I am delighted that my right hon. Friend the Secretary of State for Trade and Industry is here while we are discussing this amendment. The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) has a touching faith in the powers of Secretaries of State. I know that my right hon. Friend shares my view that competition and the opportunity to take one's business elsewhere is a much better choice for the consumer than an appeal to a Secretary of State—even one as able as my right hon. Friend. The amendment fails to grasp the realities of the market, which provides competition, and it also fails to understand the purpose of the Bill.
To provide a means of appeal to the Secretary of State on the activities of a private sector company seems to me to go against what we know works and what we know is effective. It is yet another example of the Labour party seeking to impose Whitehall interference and excessive regulation on industry. The normal commercial and legal remedies would be available to customers of the privatized


Insurance Services Group who had difficulties with the privatised company about the performance of any contracts. That goes without saying.
Of course, the privatised company will have to comply with the requirements of the Companies Acts, and the insurance company will have to be authorised by the Secretary of State under the insurance companies legislation. The Secretary of State is responsible for the administration of the legislation. Anyone is free to make representations to him about issues arising; no special arrangements have to be made.
I urge the House to reject an amendment that, once again, seeks to introduce Whitehall regulation as a substitute for competition.

Ms. Quin: If the sale of ISG were to result in the existence of only one major short-term credit insurer in the United Kingdom—a virtual monopoly—would the Secretary of State be willing to receive representations from exporters concerned about rises in premium rates or about the possibility of the withdrawal of facilities? Does the Minister accept that regulation is important? The Government have told us that they are rather keen on regulation as a framework within which private companies operate. That makes our amendment seem very reasonable.

Mr. Sainsbury: I have already made it clear that the regulatory arrangements to which I have referred will certainly apply. As the hon. Lady knows, the market is becoming steadily more competitive, and there is every indication that whoever is chosen from the short list of those invited to tender for the purchase will continue that trend. If the purchaser—who might well at any time have a large part of the United Kingdom market—were to become uncompetitive, there would be no shortage of people willing to take on the business at more competitive rates. There would be no shortage of other suppliers of export credit insurance to whom customers could turn.
There would be no point in the purchaser's taking advantage of his customers. In a competitive world, that is not the way in which people go about their business. Business men seek to keep their customers—indeed, to build up their trade. That is why competition works, and why regulation—actually, interference and intervention —by Whitehall is not nearly such an effective means of giving the customer what he wants.

Mr. Cousins: The Minister's reply is mystifying. These amendments do not suggest any right of appeal in any sense that would be recognised at law; nor do they create any regulations or machinery that could produce regulations. They seek merely to guarantee a right to consult the Secretary of State in the event of difficulty.
The Minister talks glibly about how competition works. With the privatisation of the Insurance Services Group, we are dealing, on one hand, with a very large and commercially powerful supplier of financial services, and, on the other hand, with a range of often quite small businesses. No one doubts that a large, sophisticated multinational company, such as GEC, would readily be able to find alternative sources of insurance. It is very unlikely that the same would apply to a far less

sophisticated business, working in a particular market and providing a very narrow range of products, outside the major commercial centres of Britain. Such a business will be extremely vulnerable to the withdrawal of insurance facilities in respect of either some range of its activities or some of its markets.
I should have thought that the Minister could accept these amendments as a means of providing Government access to knowledge about the workings of the insurance market. It is astonishing that the Minister not only does not seek to welcome the right of access to such knowledge, but regards it with contempt. It is a pity that Ministers should take that view about the representations that might come to them from smaller businesses. No doubt they will have picked up from the tone of tonight's debate just in what regard the Minister places them.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15

SHORT TITLE, INTERPRETATION, COMMENCEMENT, ETC

Mr. Michael: I beg to move amendment No. 15, in page 8, line 16, at end add—
`(7) This Act shall not come into force or replace the old law unless and until it is rendered necessary by directives agreed within the European Community.'.
After discussing a number of amendments, it is quite interesting to come back to base and discuss whether the legislation is necessary in the absence of any requirement from Europe for the changes which are the basis of the Bill.
It is a fact that existing EC legislation on official, state-backed export credit insurance does not prohibit the ECGD from providing insurance for United Kingdom exporters exporting to other EC markets and that if new legislation were to be introduced prohibiting such insurance official export credit insurers such as ECGD would have sufficient time to adjust—probably two to three years as with single market legislation. It is a fact that if existing legislation, for instance the distortion of trade restrictions under article 92 of the treaty of Rome, were to be interpreted afresh in relation to official export credit insurance, again there would be plenty of time for bodies such as the ECGD to react and change. As we said before the start of the Bill's sad progress through the House, there would be plenty of time for any changes to be made were there to be such pressure from Europe, but there is no such pressure. To push ahead with ISG's full privatisation is unnecessary at this stage in relation to EC legislation. If 1SG were to be changed to a Government-owned company, the Government would be able to continue to provide full backing—though not as direct as at present —for United Kingdom exporters, while retaining the flexibility to effect a full privatisation if any new EC legislation were to arise. The fact that the Government have not chosen that course demonstrates the dogmatic and extreme nature of the legislation.
The question of increased competition for ISG services to United Kingdom exporters from other EC export credit insurers is slightly different. With effect from 1 July 1990 when the second non-life insurance directive came into force, EC insurers have been able to provide insurance for exporters in one member state in the EC without needing to have a representative or branch office in that member state. Some state-backed credit insurers, notably COFACE of France, have had offices in the United
Kingdom for several years without having any serious impact on the ECGD. However, the directive has forced the pace of change and has meant that the ISG should face greater competition for its services—although that has not materialised yet—which could threaten its future viability and which it cannot counter. That is because the Act under which the ECGD operates relates only to United Kingdom exporters, and the Government are very unlikely to agree to a change of the Act to allow the ECGD to insure exports from other EC countries and thus compete on an equal basis with other European credit insurers.
It is sad that the Government do not wish our own institutions to compete on an equal basis with European institutions. Although other EC business would be profitable, the insurance provided for it by the Government would be regarded as an additional contingent liability. It must be the case that a Government-owned company, and the 1SG as it is currently constituted, could provide export credit insurance for other EC exporters just as easily as a privatised ISG would be able to, and such insurance could be provided under a separate account operated on a strictly commercial basis.
As I said, we come back to the beginning of the sad series of events. When an announcement was made of the Government's intention to take the Insurance Services Group into the private sector, my hon. Friend the Member for Cardiff, West (Mr. Morgan) and I went to see the then Secretary of State for Trade and Industry—who usually managed to stay awake during debates. We asked him to tell us what made the privatisation necessary, but he was completely unable to do so. That is why I want the full attention of the present Secretary of State. The Minister who represented him in Committee throughout the privatisation process was unable, when challenged, to give us a reason why the legislation was necessary as a result of any legislation, regulation or other changes within the European Community. There is no reason for the Bill. No reason other than that it is an EC requirement has been given. The only reason offered by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), when he announced the intention to proceed with the legislation, was that it would be required by European Community directives. The amendment merely states:
This Act shall not come into force or replace the old law unless and until it is rendered necessary by directives agreed within the European Community.
All we ask is that the reason given for the legislation by the then Secretary of State should be the criterion according to which it is acted upon. Surely that is reasonable. Surely the Minister and the present Secretary of State agree that the amendment would require them merely to stand by their own logic in introducing the legislation.

Mr. Sainsbury: Of all the amendments tabled by the Opposition, I suspect that this is the most damaging to the interests of exporters—and it has had some competition. The amendment is wide ranging and covers the whole Bill. If it were accepted—especially against the background presented by the hon. Member for Cardiff, South and Penarth (Mr. Michael)—it would delay for a considerable time—and from what he said, he would prefer it to delay it for ever—the opportunity for the ECGD to exercise its new powers contained in part I. It would also prevent the ECGD from using the new financial management powers contained in clause 3, which permit arrangements to contain, control and possibly reduce the costs of the

ECGD's portfolio. That hardly seems sensible. It would delay the modernisation and improvement of the powers of the continuing ECGD. The new arrangements on investment and insurance and the new reporting arrangements would all be prevented by the amendment.
Perhaps more seriously, the Opposition persist in their erroneous belief that there is no reason to suspect that there would be any challenge from the European Community to state export credit insurance operations. They have argued that, because there is not yet any European Community legislation prohibiting state involvement, Government plans to privatise the insurance services business are over-hasty or premature. I can only imagine what accusations they would make when, if EC legislation were passed, we were not prepared for it and our exporters suffered as a consequence. I suggest that the Opposition's belief means that they are turning their back on reality. Debates on the implication of official export credit insurance operations have been a regular feature of discussions within the relevant experts' working groups in Brussels in recent months in anticipation of the completion of the single market at the end of 1992. There have been a number of Commission initiatives to regulate or to harmonise officially supported export credits. The possibility of a challenge to official short-term operations has become more immediate.
There was the delivery of the Advocate General's opinion following the action brought by a Belgian private credit insurer against the European Council and the European Commission. The Advocate General considered the case inadmissible on technical grounds, but otherwise well founded in substance. That is fairly conclusive evidence that the legal challenge to which we refer is real and imminent.
The case was brought by Les Assurances du Credit SA, known as Namur, against the EC Council and the Commission. Namur alleges that the various directives relating to non-life insurance discriminate against private sector companies by placing official agencies in a privileged position. That legal opinion reinforces a view commonly held about official export credit arrangements. I suggest to the hon. Member for Cardiff, South and Penarth not only that the amendment is ill-conceived in that it would delay getting the benefit of the improvements in the powers of ECGD which are contained throughout the Bill, but that it ignores the reality of the legal challenge that is looming from the European Community. I therefore urge the House to reject the amendment.

Mr. Michael: The Minister has repeated his arguments. They are no stronger and no more valid than they were in Committee when they were roundly dismissed. He says that it is damaging not to be ready for change. It is even more damaging to fail to support our exporters. The Minister says that it is a damaging and wide-ranging amendment. Despite its brevity, the debate has demonstrated that the Government's only argument for introducing the Bill is, as it always was, misplaced and false. We are content to stand by our demonstration of that in this debate. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified.]

Mr. Sainsbury: I beg to move, That the Bill be now read the Third time.
The Bill is excellent and will provide further assistance to British exporters in a number of ways. The Opposition's resistance to it has been another manifestation of their attitude to privatisation, which the hon. Member for Cardiff, South and Penarth (Mr. Michael) has derided as unnecessary, unproductive and unhelpful to exporters. It is quite the contrary. A privatised Insurance Services Group will be able to provide a still better and more flexible service to exporters. It will be able to provide the domestic credit insurance that it is presently unable to provide and it will, therefore, cover its customers' needs more comprehensively, which customers are clearly anxious to see. Furthermore, it will be able to pursue business overseas if it so wishes. I scarcely think that the Opposition would propose that taxpayers' money should be used through a Government-owned ECGD to enable that business to provide export credit indurance for the exports of other countries competing with British exports.
The primary reasons for the privatisation are business reasons, which the Opposition have persistently failed to recognise. Privatisation is the only realistic way in which to enable insurance services to compete freely with other credit insurers in Europe and to meet the needs of United Kingdom companies by allowing them access to a package of credit insurance covering both domestic and export business. At present, the Insurance Services Group's ability to respond to competition is restricted. The Bill will remove those restrictions and enable the Insurance Services Group to provide a still better service to our exporters. It will also allow the Insurance Services Group to meet any legal challenge. It is clear from what I said on Report that the legal challenge is real and near.
The legal challenge may be mounted at any time against state export credit insurers as representing a state aid incompatible with article 92 of the treaty of Rome. Furthermore, the Bill contains a number of other improvements, especially those in clause 3, which will enable the continuing ECGD to manage its important portfolio of investments to the greater benefit of the taxpayer and, therefore, to the greater benefit of exporters.
The Bill is the most radical overhaul of export credit arrangements in their 70 years of existence. The Government have never shirked from taking radical steps when they are necessary and beneficial to British industry, as the Bill is. It will help by providing a more flexible, more responsive, more customer-oriented and up-to-date service through the privatised Insurance Services Group and it will enable the ECGD to provide a better service for project exports. I commend the Bill to the House.

Ms. Quin: The Third Reading takes place after detailed consideration of the Bill, particularly in Committee. I pay tribute to my hon. Friends for the way in which they scrutinised it so carefully in Committee. In doing so, they effectively stood up for the interests of industry and exporters.
The Minister has tried to come across as the voice of sweet reason. One would think that he has been listening carefully to exporters and industry and to the work force at the ECGD in Cardiff and their representatives, and that he is part of a Government who strongly support exports.
One would never realise the reality—that, first, the Bill is highly controversial legislation which does not command the widespread support that the Minister suggested and, secondly, that exporters are deeply suspicious and worried about the future of the ECGD and about privatisation.
Exporters are worried about how the ECGD will work. In particular, as they have told us several times, they are worried about the workings of the portfolio management system and about the continuing pressure to reduce cover for many countries and markets. They believe that the restrictions on the ECGD will not allow them to win business and contracts in those markets.
It is clear from the correspondence and meetings that Labour Members have had with firms and their representatives that they are deeply worried about certain aspects of the privatisation. Manufacturing industry is particularly worried. Some of our major exporters, who sub-contract to many smaller firms, are deeply worried about the effect of privatisation and what it will mean for premium rates and the amount of insurance and reinsurance that will be available. The Minister sought to offer industry some comfort about the system for reinsurance and political risk reinsurance. None the less, the strongest objections and concerns have been expressed to us, and nothing less than a statutory commitment to continue political risk reinsurance, in its fullest form, will be acceptable to industry.
One would never think that the Bill is being considered against the background of three years of trade deficit or at a time of recession, when industry is suffering considerable hardship and difficulty. The Bill is an inappropriate response to current circumstances and we are not surprised that industry is so concerned about it.
In Committee, some Conservative Members were unhappy about what was being proposed. They have been less vocal tonight, but we have noticed some mutterings and expressions of continuing unhappiness on the Government Benches. Those hon. Members are in close contact with firms and industries in their constituencies and are aware of the amount of discontent that is being expressed.

Mr. Barry Porter: I do not wish to involve myself in the mutterings which it has been suggested come from this side. It strikes me that most Conservative Members accept the general principles of privatisation, competition and so on in the Bill. Mutterings arise only about whether industrialists and exporters are getting equality of treatment with competitors. That is the problem. Perhaps the hon. Lady will ask the Minister whether that is to be kept under continual review. I do not like to use the phrase "level playing field", but there is in the Bill an element of digging holes in the pitch.

Ms. Quin: Indeed, the arguments about the level playing field were consistently advanced in Committee. Certainly exporters are not so much muttering as shouting discontent about this issue. Many statistics have been given for the different premium rates charged in different parts of Europe; they show that our exporters are disadvantaged compared with their European counterparts.
Even if privatisation were shown to be desirable, my hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) is right to say that the timing of the measure is unfortunate as we do not know what the European


Community is likely to propose. It is simply silly to guess its proposals in advance. As a result of whatever the proposals are, the Minister may well find that this legislation is inappropriate.
The legislation will now proceed to another place. I hope that the Government will not be able to rely on the supine support of their supporters there. It is well known that there are independent-minded members who may support the Government on certain issues, but may not do so on this legislation. We urge the Government to listen carefully to the amendments that are likely to be tabled in the other place.
Better than accepting the amendments tabled in the other place, it would be advisable for the Government even at this late stage to abandon this ill-judged, ill-thought-out and dogmatic legislation.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 281, Noes 194.

Division No. 109]
[9.57 pm


AYES


Aitken, Jonathan
Couchman, James


Alexander, Richard
Cran, James


Alison, Rt Hon Michael
Currie, Mrs Edwina


Allason, Rupert
Davies, Q. (Stamf'd &amp; Spald'g)


Amess, David
Davis, David (Boothferry)


Amos, Alan
Day, Stephen


Arbuthnot, James
Devlin, Tim


Arnold, Jacques (Gravesham)
Dickens, Geoffrey


Arnold, Sir Thomas
Dicks, Terry


Ashby, David
Dorrell, Stephen


Aspinwall, Jack
Douglas-Hamilton, Lord James


Atkinson, David
Dover, Den


Baker, Nicholas (Dorset N)
Durant, Sir Anthony


Baldry, Tony
Dykes, Hugh


Banks, Robert (Harrogate)
Eggar, Tim


Batiste, Spencer
Emery, Sir Peter


Bellingham, Henry
Evans, David (Welwyn Hatf'd)


Bendall, Vivian
Evennett, David


Bennett, Nicholas (Pembroke)
Fallon, Michael


Benyon, W.
Favell, Tony


Bevan, David Gilroy
Fenner, Dame Peggy


Biffen, Rt Hon John
Field, Barry (Isle of Wight)


Blackburn, Dr John G.
Finsberg, Sir Geoffrey


Blaker, Rt Hon Sir Peter
Fishburn, John Dudley


Body, Sir Richard
Fookes, Dame Janet


Bonsor, Sir Nicholas
Forman, Nigel


Boscawen, Hon Robert
Forsyth, Michael (Stirling)


Boswell, Tim
Fowler, Rt Hon Sir Norman


Bottomley, Peter
Fox, Sir Marcus


Bottomley, Mrs Virginia
Franks, Cecil


Bowden, Gerald (Dulwich)
Freeman, Roger


Bowis, John
French, Douglas


Boyson, Rt Hon Dr Sir Rhodes
Fry, Peter


Brandon-Bravo, Martin
Gale, Roger


Brazier, Julian
Gill, Christopher


Brown, Michael (Brigg &amp; Cl't's)
Glyn, Dr Sir Alan


Bruce, Ian (Dorset South)
Goodhart, Sir Philip


Buck, Sir Antony
Goodlad, Alastair


Burns, Simon
Goodson-Wickes, Dr Charles


Burt, Alistair
Gorman, Mrs Teresa


Butler, Chris
Gorst, John


Butterfill, John
Grant, Sir Anthony (CambsSW)


Carlisle, John, (Luton N)
Greenway, Harry (Ealing N)


Carlisle, Kenneth (Lincoln)
Greenway, John (Ryedale)


Carrington, Matthew
Gregory, Conal


Cash, William
Griffiths, Peter (Portsmouth N)


Chapman, Sydney
Grist, Ian


Chope, Christopher
Ground, Patrick


Churchill, Mr
Grylls, Michael


Clark, Dr Michael (Rochford)
Hague, William


Clark, Rt Hon Sir William
Hamilton, Hon Archie (Epsom)


Colvin, Michael
Hamilton, Neil (Tatton)


Coombs, Anthony (Wyre F'rest)
Hampson, Dr Keith


Coombs, Simon (Swindon)
Hannam, John





Hargreaves, A. (B'ham H'll Gr')
Nicholson, David (Taunton)


Hargreaves, Ken (Hyndburn)
Nicholson, Emma (Devon West)


Harris, David
Norris, Steve


Haselhurst, Alan
Onslow, Rt Hon Cranley


Hawkins, Christopher
Oppenheim, Phillip


Hayhoe, Rt Hon Sir Barney
Page, Richard


Hayward, Robert
Paice, James


Heathcoat-Amory, David
Parkinson, Rt Hon Cecil


Heseltine, Rt Hon Michael
Patnick, Irvine


Hicks, Mrs Maureen (Wolv' NE)
Patten, Rt Hon Chris (Bath)


Higgins, Rt Hon Terence L.
Patten, Rt Hon John


Hill, James
Pattie, Rt Hon Sir Geoffrey


Hogg, Hon Douglas (Gr'th'm)
Peacock, Mrs Elizabeth


Holt, Richard
Porter, Barry (Wirral S)


Hordern, Sir Peter
Porter, David (Waveney)


Howard, Rt Hon Michael
Portillo, Michael


Howell, Ralph (North Norfolk)
Powell, William (Corby)


Hughes, Robert G. (Harrow W)
Price, Sir David


Hunt, Rt Hon David
Raison, Rt Hon Sir Timothy


Hunt, Sir John (Ravensbourne)
Rathbone, Tim


Hunter, Andrew
Rhodes James, Robert


Irvine, Michael
Riddick, Graham


Irving, Sir Charles
Ridley, Rt Hon Nicholas


Jack, Michael
Roberts, Sir Wyn (Conwy)


Janman, Tim
Rost, Peter


Jessel, Toby
Rowe, Andrew


Johnson Smith, Sir Geoffrey
Rumbold, Rt Hon Mrs Angela


Jones, Gwilym (Cardiff N)
Ryder, Rt Hon Richard


Jones, Robert B (Herts W)
Sackville, Hon Tom


Jopling, Rt Hon Michael
Sainsbury, Hon Tim


Kellett-Bowman, Dame Elaine
Sayeed, Jonathan


Key, Robert
Scott, Rt Hon Nicholas


Kirkhope, Timothy
Shaw, David (Dover)


Knapman, Roger
Shaw, Sir Giles (Pudsey)


Knight, Greg (Derby North)
Shelton, Sir William


Knox, David
Shephard, Mrs G. (Norfolk SW)


Latham, Michael
Shepherd, Colin (Hereford)


Lawrence, Ivan
Shepherd, Richard (Aldridge)


Leigh, Edward (Gainsbor'gh)
Shersby, Michael


Lennox-Boyd, Hon Mark
Sims, Roger


Lester, Jim (Broxtowe)
Skeet, Sir Trevor


Lilley, Rt Hon Peter
Smith, Sir Dudley (Warwick)


Lloyd, Sir Ian (Havant)
Smith, Tim (Beaconsfield)


Lloyd, Peter (Fareham)
Soames, Hon Nicholas


Lord, Michael
Speed, Keith


Luce, Rt Hon Sir Richard
Speller, Tony


Lyell, Rt Hon Sir Nicholas
Spicer, Sir Jim (Dorset W)


Macfarlane, Sir Neil
Spicer, Michael (S Worcs)


MacGregor, Rt Hon John
Squire, Robin


MacKay, Andrew (E Berkshire)
Stanbrook, Ivor


Maclean, David
Stanley, Rt Hon Sir John


McLoughlin, Patrick
Steen, Anthony


McNair-Wilson, Sir Patrick
Stern, Michael


Madel, David
Stevens, Lewis


Malins, Humfrey
Stewart, Allan (Eastwood)


Mans, Keith
Stewart, Andy (Sherwood)


Marland, Paul
Stewart, Rt Hon Ian (Herts N)


Marlow, Tony
Stokes, Sir John


Marshall, John (Hendon S)
Summerson, Hugo


Marshall, Sir Michael (Arundel)
Tapsell, Sir Peter


Martin, David (Portsmouth S)
Taylor, Ian (Esher)


Mates, Michael
Taylor, Teddy (S'end E)


Maude, Hon Francis
Tebbit, Rt Hon Norman


Maxwell-Hyslop, Robin
Thompson, D. (Calder Valley)


Meyer, Sir Anthony
Thorne, Neil


Miller, Sir Hal
Thurnham, Peter


Mills, Iain
Tracey, Richard


Mitchell, Andrew (Gedling)
Tredinnick, David


Mitchell, Sir David
Trippier, David


Moate, Roger
Trotter, Neville


Monro, Sir Hector
Vaughan, Sir Gerard


Montgomery, Sir Fergus
Viggers, Peter


Morris, M (N'hampton S)
Wakeham, Rt Hon John


Morrison, Sir Charles
Waldegrave, Rt Hon William


Moss, Malcolm
Walden, George


Mudd, David
Walker, Bill (T'side North)


Neale, Sir Gerrard
Walters, Sir Dennis


Needham, Richard
Ward, John


Nelson, Anthony
Watts, John


Nicholls, Patrick
Wells, Bowen






Wheeler, Sir John
Woodcock, Dr. Mike


Whitney, Ray
Yeo, Tim


Widdecombe, Ann
Young, Sir George (Acton)


Wiggin, Jerry
Younger, Rt Hon George


Wilkinson, John



Wilshire, David
Tellers for the Ayes:


Winterton, Mrs Ann
Mr. David Lightbown and


Wolfson, Mark
Mr. John M. Taylor.


Wood, Timothy





NOES


Abbott, Ms Diane
Darling, Alistair


Adams, Mrs Irene (Paisley, N.)
Davies, Rt Hon Denzil (Llanelli)


Allen, Graham
Davies, Ron (Caerphilly)


Anderson, Donald
Davis, Terry (B'ham Hodge H'l)


Archer, Rt Hon Peter
Dewar, Donald


Armstrong, Hilary
Dixon, Don


Ashley, Rt Hon Jack
Doran, Frank


Ashton, Joe
Duffy, A. E. P.


Barnes, Harry (Derbyshire NE)
Dunwoody, Hon Mrs Gwyneth


Barron, Kevin
Eadie, Alexander


Battle, John
Eastham, Ken


Beckett, Margaret
Evans, John (St Helens N)


Beith, A. J.
Ewing, Mrs Margaret (Moray)


Benn, Rt Hon Tony
Fatchett, Derek


Bennett, A. F. (D'nt'n &amp; R'dish)
Fearn, Ronald


Benton, Joseph
Field, Frank (Birkenhead)


Bermingham, Gerald
Flannery, Martin


Bidwell, Sydney
Flynn, Paul


Blair, Tony
Foot, Rt Hon Michael


Blunkett, David
Foster, Derek


Boateng, Paul
Fraser, John


Boyes, Roland
Fyfe, Maria


Bradley, Keith
Galbraith, Sam


Bray, Dr Jeremy
Galloway, George


Brown, Nicholas (Newcastle E)
Garrett, John (Norwich South)


Brown, Ron (Edinburgh Leith)
Garrett, Ted (Wallsend)


Bruce, Malcolm (Gordon)
George, Bruce


Buckley, George J.
Gilbert, Rt Hon Dr John


Caborn, Richard
Godman, Dr Norman A.


Callaghan, Jim
Gould, Bryan


Campbell, Menzies (Fife NE)
Graham, Thomas


Campbell, Ron (Blyth Valley)
Grant, Bernie (Tottenham)


Campbell-Savours, D. N.
Griffiths, Nigel (Edinburgh S)


Canavan, Dennis
Griffiths, Win (Bridgend)


Carlile, Alex (Mont'g)
Grocott, Bruce


Clark, Dr David (S Shields)
Hardy, Peter


Clarke, Tom (Monklands W)
Harman, Ms Harriet


Cohen, Harry
Haynes, Frank


Cook, Robin (Livingston)
Healey, Rt Hon Denis


Cousins, Jim
Henderson, Doug


Crowther, Stan
Hinchliffe, David


Cryer, Bob
Hoey, Ms Kate (Vauxhall)


Cummings, John
Hogg, N. (C'nauld &amp; Kilsyth)


Cunliffe, Lawrence
Home Robertson, John


Cunningham, Dr John
Hood, Jimmy


Dalyell, Tam
Howarth, George (Knowsley N)





Howells, Dr. Kim (Pontypridd)
Parry, Robert


Hughes, John (Coventry NE)
Patchett, Terry


Hughes, Robert (Aberdeen N)
Pendry, Tom


Hughes, Roy (Newport E)
Pike, Peter L.


Illsley, Eric
Powell, Ray (Ogmore)


Ingram, Adam
Prescott, John


Janner, Greville
Primarolo, Dawn


Kennedy, Charles
Quin, Ms Joyce


Kirkwood, Archy
Randall, Stuart


Lambie, David
Redmond, Martin


Lamond, James
Reid, Dr John


Leadbitter, Ted
Richardson, Jo


Leighton, Ron
Robertson, George


Lestor, Joan (Eccles)
Rogers, Allan


Lewis, Terry
Rooney, Terence


Livingstone, Ken
Ross, Ernie (Dundee W)


Lloyd, Tony (Stretford)
Rowlands, Ted


Lofthouse, Geoffrey
Ruddock, Joan


Loyden, Eddie
Salmond, Alex


McAllion, John
Sedgemore, Brian


McAvoy, Thomas
Sheerman, Barry


McCartney, Ian
Shore, Rt Hon Peter


Macdonald, Calum A.
Short, Clare


McFall, John
Sillars, Jim


McKay, Allen (Barnsley West)
Skinner. Dennis


McKelvey, William
Smith, Andrew (Oxford E)


McLeish, Henry
Smith, C. (Isl'ton &amp; F'bury)


Maclennan, Robert
Smith, Rt Hon J. (Monk'ds E)


McMaster, Gordon
Smith, J. P. (Vale of Glam)


McNamara, Kevin
Soley, Clive


McWilliam, John
Spearing, Nigel


Madden, Max
Steel, Rt Hon Sir David


Mahon, Mrs Alice
Stott, Roger


Marek, Dr John
Strang, Gavin


Marshall, David (Shettleston)
Thompson, Jack (Wansbeck)


Martin, Michael J. (Springburn)
Wallace, James


Martlew, Eric
Wardell, Gareth (Gower)


Maxton, John
Wareing, Robert N.


Meacher, Michael
Watson, Mike (Glasgow, C)


Meale, Alan
Welsh, Andrew (Angus E)


Michael, Alun
Welsh, Michael (Doncaster N)


Michie, Mrs Ray (Arg'l &amp; Bute)
Williams, Rt Hon Alan


Mitchell, Austin (G't Grimsby)
Williams, Alan W. (Carm'then)


Morgan, Rhodri
Wilson, Brian


Morley, Elliot
Winnick, David


Morris, Rt Hon A. (W'shawe)
Wise, Mrs Audrey


Morris, Rt Hon J. (Aberavon)
Worthington, Tony


Mowlam, Marjorie
Wray, Jimmy


Mullin, Chris
Young, David (Bolton SE)


Murphy, Paul



Oakes, Rt Hon Gordon
Tellers for the Noes:


O'Brien, William
Mrs. Llin Golding and


Orme, Rt Hon Stanley
Mr. Jimmy Dunnachie.

Question accordingly agreed to.

Bill read the Third time, and passed.

Education (Scotland)

Mr. Donald Dewar: I beg to move,
That the Testing in Primary Schools (Scotland) Regulations 1990 (S.I., 1990, No. 2104) dated 24th October 1990, a copy of which was laid before this House on 25th October, in the last Session of Parliament, be revoked.
I regret that the Secretary of State for Scotland is not with us. I do not know the reason for his absence, and I do not want to make too much of it. This is an important debate with far-reaching consequences, and it is unfortunate that the head of the house, in Conservative terms at least, has decided not to be present.
The issue has been subjected to a creditable and serious debate, although there have been the odd exceptions. I have a cutting from the Daily Record of 12 April which states that the leader of the Conservative group on Strathclyde regional council, Councillor Fergus Clarkson, when asked to consider the fact that about two thirds of the parents in Strathclyde withdrew their children from the tests, said:
What beats me about Glasgow was I didn't think two thirds of parents there were able to write letters.
That has not done much for the standard of the argument. This is the first debate on the issue in the House and hon. Members will have a chance to express their anxiety and to reflect the concern that is widely felt in their constituencies. I am conscious of the fact that time is not on our side and that the arguments must be concise— perhaps almost in precis form. The Opposition strongly feel that what is happening is a tragedy. National testing for primary 4 and primary 7 pupils is being imposed, grafted on to primary education, in an unnecessary and counter-productive way. That is sad because it is muddying the waters and endangering a great deal of agreement and good will.
That good will stems from the fact that most of us accept that there is merit in the five-to-14 programme—the Labour party certainly takes that view. We accept that there is both a need for national levels of attainment, and a flow of information, and an important place for continuous assessment and diagnostic testing. There is widespread support for that, but unfortunately it is mirrored by equally widespread opposition to national testing. There is a genuine fear that national testing will distort the curriculum and ultimately lead to league tables within schools and the misapprehension of the worth of schools and the way in which they perform. There is a fear that it is part of a general drift towards seeing education as a commodity that can be manipulated by market forces.
There is an unfortunate feeling that questions have not been fully answered and that there has been a lack of consultation. There is a feeling, which I share, that it would have been very much wiser to let the five-to-14 programme become properly established and well-bedded into the system before the issue of national testing was addressed, if the Government insisted on addressing it at all. There is resentment of the fact that, of the six working papers in connection with the programme that have been produced, only working paper number 5, dealing with national testing, does not have a consultation period built into it.
I have put the arguments in shorthand, and I say to the House genuinely that they are not frivolous. I notice that

there is support for them not only from parents and teachers, but from the educational hierarchy—if those involved do not object to that title. I noticed that in the Glasgow Herald on 7 March, Mr. Ian Collie, director of education of Central region, questioned the educational case and expressed concern about the stress and difficulties that might result from the introduction of a rigid national testing system.
There is also a fear of a hidden agenda. The Minister may feel, when I say that, that he is being much misunderstood, but I am afraid that the record invites some suspicion. It is interesting that in the MORI poll published in The Sunday Times this weekend, 59 per cent. of parents who said that they voted Tory believed that the introduction of national testing was a preliminary to the return of streaming in our schools. That shows how widespread and non-partisan the fears are, given the record of recent years.
The Minister of State, Scottish Office is perhaps inured to such a position, but on this issue he is a lonely figure. There has not been a great deal of covering fire of authority or quality for his position. There is every reason why he should think again. The teachers' opposition has been sustained not by fringe interests and fringe enthusiasms, but by deeply held and widely based views. Above all, the opposition of parents has shown that they give a massive vote of no confidence to the national testing system as proposed. That striking vote of no confidence is impressive and unambiguous, covering and coming from all regions of the country and all social groupings in the community. The MORI poll showed that by far the largest block of opinion—47 per cent.—was against national testing per se. More interestingly, 80 per cent of those polled were against national testing being a compulsory system built into school administration.
The polls predicted opposition and the reality far exceeded expectations or fears, depending on which side of the argument the observer took. In every district of Scotland, parents have acted out of conviction by withdrawing their children from the tests. I am told that in Strathclyde, 41,000 out of 53,000 children in the relevant groups have not been tested. In Fife, 5,000 individual letters from parents were received, in a mass test of opinion, and 60 per cent. of the eligible group were withdrawn from testing.
There is always a little difficulty about the figures and accuracy, but as I understand it from a trawl around the education authorities, and this is confirmed from a number of sources, a clear majority of parents have now withdrawn their children from the primary 4 and primary 7 testing round this year—probably more than 60 per cent. of the eligible group. That is an almost unprecedented happening in my experience and suggests that there is an unease and disquiet that we ignore at our peril.
Furthermore, it is a breakdown of consensus, a protest, that the Minister would be unwise to ignore. More than any other, the Minister must recognise what has happened as a judgment. To be fair to him, he has championed parent power and argued for a greater role for parents in the formation of education policy. Therefore, it would be unwise, undignified and damaging to his credibility were he now to turn round and defy one of the clearest expressions of parental opinion on an education matter that I can remember in my career. The Minister established school boards to institutionalise and channel parental influence. He now knows that the boards have bitten the


hand that fed them. They have been largely responsible for focusing and leading the opposition to national testing. Again, that is a clear expression of opinion using the machinery that the Minister said would be of increasing significance and that was set up for that purpose.
I do not wish my brief contribution to be abrasive, but I urge the Minister to respond to the parental concern that he knows exists and that I have described. Recognition of that fact by the Minister would be in the interests of pupils and our school system. If he will not recognise it, he has a duty to spell out what will happen now. Will he pursue the education authorities and insist that they insist? Is he saying that parental opinion should be ignored in this matter, perhaps forcing some parents who feel strongly enough to withdraw their children from education for the period of the tests? That would have consequences that none of us would want. Does he want to outlaw balloting or other tests of parental opinion on this issue? What sanctions will he apply if he misguidedly goes ahead with the scheme in the current atmosphere? By what authority would they be imposed?
I genuinely believe, having talked to many parents, that the problems will mount on every side if the Minister persists in what will be an embittering and pointless exercise. I appeal to him to recognise the reality of the situation and to take national testing off the agenda, at least at this stage. He should establish on strong foundations the five-to-14 programme, which commands respect and assent, and build from there. The alternative is confrontation, which is damaging and unnecessary. It is a legacy that no Minister should wish to place on our education system.
I remind the Minister—I know that he is familiar with the quote as it has been used before—of what he said on 9 May 1989:
it would be a failure of good Government if, at the end of the day, we could not ensure that national testing was introduced in an orderly and consistent manner throughout the country." —[Official Report, First Scottish Standing Committee, 9 May 1989; c. 1374.]
On that basis, it is time for him to think again, and I hope that he will show his willingness to do so during this debate.

The Minister of State, Scottish Office (Mr. Michael Forsyth): The hon. Member for Glasgow, Garscadden (Mr. Dewar) was kind enough to refer to my comments in Committee in respect of national testing. I recall that he and his colleagues did not vote against the power that we took in that Bill, as the hon. Member for Moray (Mrs. Ewing) pointed out, to introduce testing.
Seldom can a measure have been more subject to wilful misrepresentation and misguided hostility than the proposal for national testing in our schools. I am sure that the House will agree that some testing is beneficial for individual pupils and their parents and for those concerned with judging the effectiveness of schools. Children's strengths and weaknesses need to be diagnosed and assessed so that appropriate steps can be taken. Parents want to know how their children are developing against a broadly agreed, objective yardstick. A measure

of the progress that a school is making with pupils should form an important part of any system of assessing a school's performance.

Mr. John Home Robertson: How does the Minister, as a parent, know how his child is getting on in the private school in my constituency? Why is my son being compulsorily tested in his primary school in the Borders region, regardless of the wishes of his parents, when private schools are not being tested? What happened to parental choice and how can the Minister call it national testing if privatised schools are left out of it?

Mr. Forsyth: I am sorry that the hon. Gentleman disagreed with my opening remarks. They were taken from "Children Come First", which sets out the Labour party's policy for raising standards in schools. The hon. Gentleman is wrong about my son attending a school in his constituency, but it is right that my children go to independent schools.
One of the extraordinary features of the regulations is that independent schools are not required under them to implement the testing proposals, but virtually all of them are doing so voluntarily. Independent schools are writing to parents to tell them that they are doing so because they believe that the testing will be of value to the children, to parents and to the education system. I venture to suggest that it is not in that sector that perhaps the greatest need exists for further progress on standards of assessment.
I said that the House might accept my opening remarks——

Mrs. Margaret Ewing: Will the Minister give way?

Mr. Forsyth: If I might make some progress, I shall give way.
The hon. Member for Clydebank and Milngavie (Mr. Worthington) was quoted in The Scotsman on 27 March. He was explaining a challenge that was put to him to explain why he was whistling a different tune on primary testing from his English counterpart, the hon. Member for Blackburn (Mr. Straw). The report said:
'I start from the Scottish system', explained Mr. Worthington. 'Jack Straw starts from the English one. One of the advantages of living in two worlds is that you can look at the chaos and muddle that is the English system. What Jack Straw was saying was that he wished that he could get some rigour into the English system.'
That was in March. The hon. Member for Clydebank and Milngavie, prior to our previous debate on this issue, was quoted in the same newspaper. The article reads:
On the eve of a major Commons clash over Scottish education policy today, Tony Worthington, Labour's Front Bench spokesman, confirmed that the party is in favour of making the results of pupil testing known to parents; identifying schools which fail to match the standards of those with similar intakes.
The hon. Gentleman was putting forward a policy, which the hon. Member for Garscadden has just repudiated, of making league tables of schools. I ask the hon. Member for Garscadden whether the Labour party supports national testing. It is no good saying that testing is all right in one part of the country but not in another. Testing either has a place in education and assessment practice or it has not.
The hon. Member for Blackburn, who is the Labour party's education spokesman, seems to be clear on the matter. It is fair to say, however, that what the hon. Gentleman was saying in 1987 was different from what he


is saying now. He was saying in 1987 of the Government's policy of compulsory testing—I quote from The Times of 29 October——
Under the guise of higher standards, the Bill"—
that is the Government's Bill—
will label children as failures at the ages of seven, 11, 14 and 16, impose selection and segregate children by class and by race.
That is what the hon. Gentleman said in 1987, but in 1990, according to The Times, he mused:
Does a parent want to know every four years or rather more frequently?
He then said that annual tests might be better. The article in The Times added:
Nor is Mr, Straw any longer much troubled by the publication of test data, which he once said would set child against child. Labour would ensure that a child's results were released to its parents, would sample figures to establish whether national standards in the three Rs were rising or falling, and would adjust test scores for social class so that parents could compare schools. Such an approach would stop schools from citing deprivation among their intake as 'an alibi for failure', he said. 'That is the case for it. It is not just a crutch, it is so you can be tougher on schools.'
I ask the hon. Member for Garscadden how it is possible for the Labour party to be in favour of national testing and more information for parents about the three Rs in England but not in Scotland. What have Scottish parents done to deserve the Labour party's policy which would deny them that information?

Mrs. Margaret Ewing: I should be grateful if the Minister would address himself to the educational matters in the debate. When he considers the national picture of standards, has he placed in context the report published in 1989 on the assessment of achievement? The report showed that standards in reading in particular were not only remaining stable but improving. The Minister already has a national picture, so why is it important to him to implement this legislation? The organisation which produced the report will test primary 4, primary 7 and S2 every three years at the request of the Scottish Office Education Department. The tests would be undertaken by independent surveyors.

Mr. Forsyth: The hon. Lady is right. I have extended that programme. If she were being fair, she would also point out that the same programme showed a decline in standards of achievement in mathematics. But she confuses two purposes. One is to find the overall pattern of performance in the school. The other, which is the purpose of national testing, is to provide parents with the information about the individual performance of their children to which they are entitled.

Mr. Malcolm Bruce: Will the Minister give way?

Mr. Forsyth: No, I should like to make some progress.
I asked the hon. Member for Garscadden to explain the curious schism in Labour's policy north and south of the border. The only conclusion that I have been able to reach is that north of the border the Educational Institute of Scotland told the Labour party to oppose the tests, just as when the EIS told it to oppose school boards, it did so. When the EIS changed its mind, the Labour party changed its mind on school boards.

Mr. Dewar: The Minister has been reduced to insults, which suggests that he does not have much confidence in his case.
I made it clear in my opening remarks that we were in favour of diagnostic testing, continuous assessment, improved communication and the passage of information between parents and schools. All that can be achieved within the five-to-14 programme, which I welcome and on which I congratulate the Scottish Office Education Department. But we have said consistently that in the Scottish educational tradition—we believe in devolution and we practise what we preach—it is not sensible to enforce on a system that does not deem it necessary and on parents who do not want it a rigid national testing system, with all the bitterness and difficulties that will arise from it. [Interruption.]

Mr. Forsyth: As the hon. Member for Moray points out, the hon. Gentleman did not vote in Committee against national testing. He argued that he was not opposed to the principle. His hon. Friend the Member for Blackburn, Labour's education spokesman, seems to take a different view. The hon. Member for Garscadden is being fair. He argues that the position is different in Scotland. I have looked at some of the material produced by Labour-controlled education authorities in Scotland on testing, particularly that produced in Central region. The hon. Gentleman quoted Mr. Ian Collie, the director of education in Fife. Both authorities have campaigned against the proposals.
I asked the inspectorate to look at the maths tests for primary 7, which were being set in Central region. What it reported to me is important. It said:
it should be noted that the desire to scrutinise standards came from the headteachers themselves and that this was to be done at P3 and P5, as well as P7. Neither these headteachers nor the education authority consider teachers' own continuous assessment to be sufficient. The tests scrutinised here are those from primary 7. So far as we understand, the region has not yet produced those for primary 3 and primary 5.
Those are the inspectorate's conclusions, not mine. It is interesting that it compared the tests with the national tests which the hon. Member for Garscadden has repudiated. In brief, its conclusions were as follows:
The national tests are directly related to nationally agreed and published attainment targets. The national tests include important additional aspects of the mathematics curriculum, such as problem-solving and enquiry. They reflect a balance across the different aspects of mathematics and are therefore more valid. They are contextualised in line with contemporary good practice in teaching methematics. They take less time than the Central Region units and can be administered over a longer period, thus enabling teachers to fit the units into the rhythm of classwork. They are more attractively presented and better in their lay-out.
Central region and other authorities have been running their own tests, which are inferior to the national tests, but are certainly not diagnostic.

Mr. Malcolm Bruce: rose——

Mr. Forsyth: They are as old-fashioned as the tests that the hon. Member and I sat at school, and I give way to him.

Mr. Bruce: Does the Minister accept that there is widespread support for the quality of the testing material? He knows perfectly well that that is not the point at issue. Will he explain to the House what happened to his conviction that parental choice should be the determining factor? How does he define parental choice, how will he take it into account and what do parents have to do to convince him that they do not want his national test?

Mr. Forsyth: What happened to the hon. Gentleman's conviction that parents should be excluded from curricular and professional matters, which he argued forcibly during the passage of the School Boards (Scotland) Act 1988? Has he now changed his position? The hon. Gentleman argued in Committee and sought to persuade me to make the School Boards (Scotland) Act off limits for parents, as far as curricular and professional matters were concerned—[Interruption.] The hon. Gentleman asked me to define parental choice. If the position of Opposition Members has now changed, and they wish the Government to consider extending parental choice to curricular areas and to extend the powers of school boards in that area, of course I should be very happy to give that consideration. However, that is a completely——

Mr. Tom Clarke: Will the hon. Gentleman give way?

Mr. Forsyth: No, I shall not give way to the hon. Gentleman.
I would like to return to the argument about Central region, because, while the hon. Member for Garscadden and his colleagues in local government were preventing this leaflet, which gave information about the testing proposals, from being distributed to parents, one of the arguments was that the leaflet was breaking new ground. It was positive evidence that testing was the 11-plus in disguise, because it contained the sentence:
The results will help secondary schools to plan each child's further progress in education.
Therefore, you can imagine my surprise, Mr. Deputy Speaker, in discovering that Central region, with the mathematics tests that I have just described, asks its head teachers
to pass the whole script and the results to the pupil's secondary school on transfer.
A Labour-controlled education authority, which is not prepared to put out a leaflet because it might result in tests being passed on to the secondary school, is running tests that are the same, and telling parents that the tests are educationally invalid.
The hon. Member for Gordon (Mr. Bruce) said that the quality of the tests was not in doubt. He is right. Even the Labour activist who speaks for the Lothian Parents Action Group was quoted in The Scotsman on 23 January as saying:
The actual tests are therefore very user friendly and answer many of the objections related to their impact on children. The different levels are designed to take into account children's different abilities.
That is right. So, if there is nothing wrong with the test materials, what is the objection? I suspect that the objection is that the idea came from the Government and not from the Opposition.

Mr. John McFall: rose——

Mr. Forsyth: No, I shall not give way to the hon. Gentleman. I have given way—[HON. MEMBERS: "Give way."] If the hon. Gentleman allows me to make some progress I shall give way to him.
The reason why the test materials are good is that they have been written by practising teachers in Scottish schools. The evidence is that they are enjoyed by the children. Where no fuss of a political nature has been made, the tests have been carried out—[HON. MEMBERS: "Oh!"] If hon. Members doubt me I can give them evidence. The Chief Inspector of Schools has just returned

from the Western Isles—I am not sure whether the hon. Member for the Western Isles (Mr. Macdonald) is here —where he visited schools. He has reported back:
On testing one was left wondering what all the fuss is about. In each case the head teacher, assisted by someone from the authority, had discussed testing with the school board. Individual parents' questions had been answered as they arose but testing had deliberately not been given a high profile; for example, there had been no mass meetings of parents. As a result, in all three schools, testing was proceeding in orderly fashion, untrammelled by any of the emotional response and posturing by teachers and parents evident elsewhere. For example, in Stornoway primary, with some 170 plus pupils due to be tested across P4 and P7, only one parent had asked that their child be not tested and their opposition had swiftly dissipated following a discussion with the head teacher.
The same picture can be seen in the Borders.
It should also be recognised that there is a certain correlation between some of the activities that have been going on in some education authorities and parental reluctance to become involved in the tests. The words and actions of some teachers, head teachers and even education authority personnel in recent weeks have been nothing short of scandalous:
My child is dragged out each morning and asked where his withdrawal slip is—you're the only one not handed in" [Interruption.] The hon. Member may think that that is funny. That was in a telephone call from a parent in the Dumbarton division of Straythclyde:
I've been told that if I insist on testing he'll be put at a desk in a corridor to take the test.
That was another telephone call to the Department.

Mr. Brian Wilson: That is scraping the bottom of the barrel.

Mr. Forsyth: Since when has reporting parents' complaints to the House of Commons been scraping the bottom of the barrel? If the hon. Gentleman had any integrity and any belief in parental choice——

Mr. McFall: The Minister mentioned Dumbarton. I am as concerned professionally as the Minister in that regard. If there were anything wrong, I should take it up. But it should at least be incumbent on the Minister to listen to hon. Members and organise a debate on a proper intellectual basis rather than making snide comments.

Mr. Forsyth: Let me quote further:
Within 10 minutes it was obvious he was to advise parents to vote against national testing".
That is in a letter from a parent in Tayside region, talking about a presentation to a school board by a directed official.
I expected to be given both sides of the argument but what I and the rest of the parents got was nothing short of propaganda".
That was from a letter from a parent in the Renfrew division of Strathclyde. It is insupportable that teachers and education authority personnel should behave in that way. It is totally unprofessional, dishonest and an abuse of a position of trust.

Mr. Dewar: rose——

Mr. Forsyth: I hope that the hon. Gentleman will take this opportunity to say that he agrees with me.

Mr. Dewar: I do not know anything about the two individual cases to which the Minister has referred. If there have been abuses, they should of course be investigated;
but I think that there is a much more important question. Is the Minister deducing from the alleged abuses that the opposition of the parents is sham and fake?

Mr. Forsyth: No, indeed. I am deducing that in parts of the country where the education authorities and teachers have explained to parents what is involved the testing is proceeding without difficulty; it is where opposition has been politically led that there have been particular difficulties in schools. The hon. Gentleman may scoff. Does he agree with the education convener of Tayside education authority, who said in the 2 April edition of The Dundee Courier and Advertiser—an excellent newspaper:
It is becoming apparent now that there may well be exceptions where youngsters may go untested because of industrial action and logistical problems … I can see no moral justification for the authority being over-vigilant in its pursuit of those teachers."?
Where is parental choice now? Parental choice for the Labour party seems to be a one-way street. If parents choose to have their children tested, the Labour party supports those whose refuse to allow the tests to be carried out. That is what Councillor Rolf is saying. Would the hon. Member for Garscadden care to confirm what Labour policy is? Will the Labour party support the Government in taking the view that teachers ought to implement tests where parents wish them to be carried out because they are serious about parental choice? Parental choice is not a one-way street; it does not extend just to what the EIS thinks parents should choose.

Mr. Dewar: I have never supported a teachers' boycott, or said that authorities should not implement the tests. The point that has arisen, however, results from a genuine surge of opinion from parents against the tests—not politically motivated; most of the parents whom I have met have not been in a political setting, and I do not know their political views. But I know the strength of their opinions, and I think it specious and dangerous special pleading for the Minister to delude himself that this is a sham and fake opposition not built on a genuine conviction and interest in the welfare of the children concerned.

Mr. Forsyth: I am grateful to the hon. Gentleman for confirming that he takes the view that a boycott should not be supported. Therefore, I take it that he will fully support the Government when they take action under the regulations against education authorities that do not accede to parents' requests that their children should be tested in accordance with their wishes. If I have misrepresented the position, the hon. Gentleman is free to come back.

Mrs. Margaret Ewing: rose——

Mr. Forsyth: I have already given way to the hon. Lady. As she will probably want to catch your eye, Mr. Deputy Speaker, I think that I ought to wind up my remarks.
Education authorities should be in no doubt about our determination to ensure that parents get the information to which they are entitled about their children's performance in the three Rs. The five-to-14 programme, which the Opposition opposed when we first introduced it, and that was the subject of a degree of scepticism, to put it mildly, will ensure that for each subject for each year in primary school levels of attainment are defined and that levels of achievement are reported to parents on the report card. Testing is limited to the three R subjects in order to

provide objective standards by which to confirm teachers' judgments. The three Rs are important; they are the grounding in the basics that are the key to the wider curriculum.
Opposition Members have got themselves in a fix. They support testing south of the border, but they are against it north of the border. They have had to rely on a campaign of misinformation of parents in order to stir up opposition to the tests. When parents discover how, once again, they have been misled by the Labour party—just as on access to schools, just as on choice in education, just as on school boards—the Labour party will change its position. I believe that the tests will be implemented and will play an important part in raising standards in our schools.

Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. The note on the Order Paper makes it clear that the Joint Committee on Statutory Instruments drew the special attention of the House to the instrument in its report since it thought that the intra vires of the regulations was in doubt. The report is in the Vote Office. The Standing Orders of the House place an obligation, if not clearly, at least by implication, on the Minister to respond to the note on the Order Paper by making known the Government's view on the report of the Joint Committee on Statutory Instruments, which I chaired.

Mr. Deputy Speaker (Mr. Harold Walker): The Minister may seek to catch my eye in order to respond to the debate which I hope will now ensue. Perhaps he will have regard to what has just been said. However, the House will be anxious to turn to the substance of the regulations rather than to the point that the hon. Gentleman has just raised. In the obvious circumstances, may I appeal for very brief speeches, please?

Mr. Dennis Canavan: Shortly after this Tory Government came to power, I was appointed to a Standing Committee that considered one of the Bills relating to Scottish education. I can remember distinctly that the great Tory rallying cry then was, "Power to the parents" and "Parental choice." Specific reference is made in the Education (Scotland) Act 1980 not just to the desirability but to the obligation to educate pupils according to the wishes of their parents. It is somewhat ironic that the Government are now trying to foist upon pupils a national system of testing when, according to all accounts and to all the available evidence, the vast majority of Scottish parents oppose national testing.
There is also widespread opposition among the teaching profession to national testing to the extent that many teachers rightly have refused to conduct the tests. That could lead to disruption in many schools, on a scale unprecedented since the disruption that the Government provoked a few years ago during the teachers' pay dispute.
The Minister ought to have the humility to recognise that teachers, as trained professionals, are in a better position than are Government Ministers to decide what is the best form of assessment for pupils. I do not know of any teacher who is absolutely opposed in principle to assessment. I believe that most, if not all, teachers are in favour of some form of diagnostic testing and continuous assessment. But national testing, as proposed in the regulations, will put enormous pressure on teachers simply


to teach to the test—leading to distortion of the curriculum and to neglect of the development of many of the other talents of pupils.

Mr. Peter Bottomley: Can the hon. Gentleman, as a former teacher, refer the House to any systematic assessment of achievement at P4 or P7 level? Is there any means of making comparisons among local education authorities throughout Scotland?

Mr. Canavan: I do not think that the hon. Gentlemen knows much, if anything, about Scottish education. Scottish colleges of education and many other educational bodies could provide material suitable for diagnostic testing and continuous assessment—material that has far more credibility in the teaching profession in Scotland than has the scheme that it being imposed by a Minister who, I understand, has no education experience whatsoever.
It is almost incredible that the Minister has managed to find nearly £1 million to administer and advertise the scheme when he cannot find a penny for extra learning support. Indeed, it is arguable that, as a result of this scheme, less learning support will be available to many pupils. The simple reason is that much teaching time will be taken up by administration of the tests, and less will be devoted to actual teaching. It is sheer arrogance to ignore the professional opinion of teachers and the wishes of parents. As has been said, foisting this scheme on local education authority schools while fee-paying schools are given some freedom of choice is an example of double standards.
I want to devote my remaining remarks to what my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) described as a hidden agenda. I suspect that there is more to the system of national testing than meets the eye. My remarks will be based not on political prejudice but on my experience as a teacher in both primary and secondary schools in Scotland—experience that goes back to the 1960s, before the introduction of comprehensive education in many areas. At that time, in Scottish education, there was almost an obsession with formal testing, including IQ tests, VRQ tests and the qualifying examination, which in some areas was called the control examination. This obsession was such that some people involved in education thought that, on the basis of the evidence of one test, they could virtually predict a child's future when that child was 11 years old.
Of course, the post-test division of children into different categories, different groups, different classes, sometimes different schools, and certainly vastly differing education environments providing very different opportunities helped to ensure fulfilment and reinforcement of what the test was designed to predict. The result was that many pupils—in some schools, the majority of pupils—were written off as failures. Many teachers of that era, including myself, can think of former pupils who, despite having been written off at the age of 11 or 12, managed to beat the system and went on to a successful career at college or university.
Many of us raised questions at that time. The most basic was that, if those who managed to beat the system were the exception, how many more were lost in an education system that was unnecessarily divisive, unfair

and talent-wasting, because at that time there was no equality of educational opportunity? If the House accepts the regulations, I fear that the Government will be encouraged to use or abuse the tests to turn the clock back and thereby to deprive countless young people of the educational opportunity which is their birthright. I therefore ask the House to reject the regulations.

Mr. Bill Walker: There seems to be general agreement that the test material which has been prepared by teachers is good. There is also some agreement that for some time there has been a problem with pupils leaving school who are not as well educated as they should be, because they are unable to apply the three Rs effectively at work. That holds them back at a critical stage in their life, and some people never recover from that impediment.
There is also some agreement about the fact that many of the pupils who fall into that category are not backward or dim. The system has failed them. We must ask ourselves whether, if the system is failing quality individuals who have not been able to emerge as they should have done, we should look carefully at the system. The tests have been accepted as being of quality, so the argument seems to be about their application. It is interesting that the Labour party south of the border seems to agree with national testing, but that the Labour party north of the border does not.
I happen to agree with my hon. Friend the Minister —[HON. MEMBERS: "Oh."] I will now explain why. I have written to him on behalf of parents in my constituency who were very unhappy about the way in which the matter was explained to them in the schools. They said that it was biased——

Mr. John McAllion: Will the hon. Gentleman give way?

Mr. Walker: I hope that the hon. Gentleman will allow me to finish. I am talking about schools in my constituency -[HON. MEMBERS: "Which?"] I will name them if necessary.

Mr. McAllion: The hon. Gentleman will know that 205 meetings have been addressed across Tayside by education officials, not by councillors. The only councillors who have turned up at the meetings have been Tory councillors who have praised the education officials for their unbiased, knowledgeable and professional approach at the meetings. Will the hon. Gentleman withdraw the slur against education officials in Tayside?

Mr. Walker: My comments referred to the letters that I have received from my constituents about the way in which officials have presented the case in schools. They said that they were biased. I am explaining to the House —and I thought that the debate was about this—the views of parents. Parents in my constituency who have said categorically and clearly that they wish their children to be tested are now asking my hon. Friend the Minister what he will do about the education authority.
I now come to the councillors and the Labour administration. I have not mentioned them until now; only the hon. Member for Dundee, East has done so. I will do so now. What about the Labour administration?

Mr. Tom Clarke: rose——

Mr. Walker: The hon. Gentleman is not from north Tayside.
What about Mery Rolf, who stated categorically that he would not implement the law? That is effectively what he said and was another example of councillors failing to honour the legal obligations placed on them by Parliament. At what point do councillors supersede the views of Parliament?
The Labour party says that it believes in parental choice, but it cannot have only the Educational Institute of Scotland version of choice, which is Hobson's choice—do it our way or not at all. That is not acceptable to parents in my constituency. Many schools in my constituency, particularly primary schools, are very good. I should be happy for the system to show clearly that our good teachers are doing an effective job. The problem is the teachers and others in schools who know that they would not measure up under a testing system that would show clearly where they are failing.
I vividly remember the debates on school boards. It is humbug and hypocrisy for Opposition Members to say that they believe in school boards, because they did not when the legislation was proposed. When the EIS makes a pay claim, it will say that testing will require more money to do the job that we thought it had been doing. Diagnostic testing has considerable educational value, but it cannot give parents information based on national criteria. It is interesting that the Opposition, in their attempts to support the EIS, are calling for the support of parents. Parents in my constituency believe in choice and support school boards—I am pleased to say that school boards are functioning well in my constituency—and I want them to be given their right of choice, as they have demanded.

Mr. Malcolm Bruce: It is a bit rich for the Minister and the hon. Member for Tayside, North (Mr. Walker) to lecture the Opposition about parental choice. The Minister has consistently argued that he wants to increase parental involvement and to take parents' views into account.
The Minister has failed to persuade the majority of parents that the national test is a desirable or acceptable addition to the education system. In the circumstances, he should at least withdraw it until he has had an opportunity to obtain their support. He should not be imposing it against their will.
The Minister did not answer my question nor explain how he intends to determine the parental view, how he intends to consult parents and whether he will accept that parents are entitled to differ from him. He should respond to their wishes rather than spend their money on promoting a particularly inappropriate advertising campaign to change their minds.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) and many other hon. Members have said that the material that has been produced for testing, and the guidance assessment, is valuable. I have not met a teacher or anybody involved in education who has stated a different view. The Minister must know that the objection is not that that useful additional information is being imposed but that, in the context of a five-to-14 programme, we are suddenly imposing a primary 4 and a primary 7 test—sudden death testing.
The Minister has said a number of times that testing is not a matter of passing or failing. He then said that he might find money for remedial education for those who do not come up to the mark. This is a test that a child cannot pass, but can fail. That understandably gives parents considerable cause for anxiety. The test is not genuinely to seek out how to improve the performance of an individual teacher, nor is it centred on the interests of the child.
The Minister must recognise that parents want to know how their child is performing generally. That cannot be achieved by insisting that the child sits a test over a six-week period in primary 4 and that the teacher must decide several months in advance at what level to submit each child. The teacher cannot later rescind that or change that decision, unless he orders several different tests. If the child does not perform to that level, he cannot be resubmitted at a later date either at a lower or higher level. That is what most people would understand as a genuine addition to curriculum and assessment. The Minister's proposals cut right across the whole five-to-14 programme.
Will the Minister now acknowledge that, by expressing their extreme anger and taking positive action, parents have in practical terms effectively defeated the pilot scheme? In reality, the overwhelming majority of children in Scottish schools have not been submitted for this national test. Can the Minister tell the House how many children have been tested, or at least report how many have been tested, at the end of the period? I understand that, in nearly all regions, parents are being told that they do not have to submit their children to this test if they do not wish to do so.
The hon. Member for Garscadden mentioned the Secretary of State's absence, but the Minister did not say why that was. Perhaps a reason why he is not here is that he would be embarrassed to have to confront the results of a referendum conducted in Dumfries and Galloway, which is his constituency. Parents had to answer either yes or no to the simple question whether they were in favour of national testing. The response was overwhelming with almost 90 per cent. of the parents of all children responding. The response was 66 per cent. no, 34 per cent. yes. If that is not a sufficiently clear, decisive majority against the Government's national test in the Secretary of State's own constituency, I do not know what needs to be done to prove to him that parents do not wish the test to be imposed.
I agree with the Minister to some extent on one matter. It would be appropriate for teachers who have not co-operated with the test to suspend action because parents are doing the job for them. Parents have won the argument and the point has been made. I make a direct appeal to teachers to accept that they have won. In those circumstances, the Minister should agree not to press any further action against them.
Great anger has been aroused and many parents have asked teachers not to impose the test. Most local authorities have found ways to co-operate with parents and ensure that the test is not imposed against their wishes, in part because this is a grey area of the law. Those parents who want the national test should be entitled to submit their children to it, but where at least two thirds do not the Minister has wholly failed to convince us of the justification of his proposals.
It is not good enough for the Minister to suggest that he is interested in the views of parents, but only when they


support his particular prejudice. Where they have overwhelmingly, clearly and unequivocally stated that they do not want the national tests provided by him, he should do the honourable thing and accept that he must abandon the pilot scheme. He should sit down with parents and teachers at the Scottish Office Education Department and discuss how the material and progress made can be properly built into the curriculum, with the full support of teachers and parents, to meet the real interests of children.

Mr. Mike Watson: The classic mistake made by the Minister in his doomed attempt to turn the clock back in Scottish education was that of bad timing. We do not need this debate tonight as we should have had it in November when the regulations were introduced.
The timing is also wrong in that, three quarters of the way through the testing period, the regulations are meaningless because three quarters of pupils have not been tested. We no longer need the regulations because long before they are due to come into play in March next year, they will have been swept out of existence, along with the Government who introduced them.
Scottish parents must be commended on their determination to stand firm in the face of Scottish Office attempts to impose an irrelevant and unwanted system of testing that will serve no useful purpose. I also pay tribute to the spontaneity of the action of the many parent groups that sprang up when the testing regulations were introduced. Those groups were in direct contrast to the £250,000 that the Scottish Office spent on the advertising campaign to launch those regulations. A further £750,000 was spent on administering the tests. Such expenditure is shameful and the Minister should have found additional resources for learning support. If the Minister is genuinely concerned about improving standards and assisting pupils with learning difficulties, the well-established system of learning support is the means by which to achieve that.
Regional councils have been forced to cut educational budgets, and in some regions teachers are facing compulsory redundancy. It is a scandal that £1 million has been wasted on the futile national testing exercise. It is a classic example of a wasted opportunity. It would not be so bad if it were only the Government's popularity that had suffered as a result of the testing, but our young people's education has been the loser.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has already outlined the extent of the opposition throughout Scotland to the testing. I am pleased to say that a number of representatives of the parents' coalition are in the Gallery to hear the debate. Sooner or later, the Minister will be obliged to heed the views of parents and teachers. The Scottish Parent Teacher Council has articulated the views of parents and teachers, and the teaching unions, particularly the Educational Institute of Scotland, have opposed the scheme. Why does the Minister continue to ignore the views of such groups? Surely he cannot deny that parents and teachers represent their constituencies.
Time is restricted and I simply want to say that teachers, parents and the Opposition do not oppose

diagnostic testing. However, we all oppose the ill-conceived, ill-prepared and ill-explained national testing scheme. It will not survive, nor will the Minister or the Government who introduced it.

Several Hon. Members: rose——

Mr. Deputy Speaker: Order. I hope that other hon. Members will follow the hon. Gentleman's example.

Sir Hector Monro: It is the greatest of pities that, whenever we discuss one of the most important aspects of life in Scotland, it always becomes a political football. Why we cannot discuss education without making it so important politically is beyond my comprehension. That has always been so, even 20 years ago when, for better or worse, I was Minister responsible for education. Then we had problems because of a lack of accommodation, shortage of teachers and facilities. Now, the education system in Scotland is in infinitely better shape. We have adequate teachers and the pupil-teacher ratio is much lower than ever before. It is a pity that we do not appreciate those favourable circumstances.
When I was Minister, the Opposition opposed raising the school leaving age to 16. In the past, they opposed the TVEI—the technical and vocational education initiative —and the school boards. They have been opposed to almost every progressive thought of the Scottish Education Department. If the system of testing had been called continuous assessment, I dare say that the Opposition would not have raised their head.

Mr. Malcolm Bruce: It is not continuous assessment.

Sir Hector Monro: Yes it is, in effect. That is what teaching is all about. Bearing in mind that the testing scheme was approved by the Scottish Consultative Council on the Curriculum, and that the tests were developed by teachers, I find it difficult to understand why the Opposition have such a rooted objection to them.
So far, no one has mentioned the fact that this is a pilot scheme. As such, it should be given a fair run and conducted as flexibly as possible in March and April of this year to see how it goes and to learn lessons from it. In that way, it can be improved and we can determine whether to proceed with it. I cannot for the life of me understand why the Opposition, including the Liberal Democrats and the Scottish Nationalists, are not prepared to try some progressive ideas in Scotland, and to find out whether they work. If the scheme does not work, we can think again.
The hon. Member for Gordon (Mr. Bruce) talked about Dumfries and Galloway. One can make anything out of statistics. He said that 6,854 children's parents said no and that 3,529 said yes. It appears, however, that about 2,000 children's parents—I cannot get firm figures on this from the authorities—said nothing at all. So only marginally more than 50 per cent. voted against. The other 48 or 49 per cent. of children have every right to be tested, if they want to be. It is wrong to spend so much time trying to prove that the vast majority do not want testing when that majority is, after all, pretty marginal.
What will happen to local authorities that do not carry out their legal obligations? In Dumfries and Galloway, the education authority has voted by 10 to seven to give parents the right to opt out. What, therefore, is the council's legal position? Does the matter have to be put to


the full council? What happens if the decision is upheld by the full council, even though the council is setting out to break the law of the land? Will the law be upheld for parents who want their children tested? Presumably, about 4,000 parents in Dumfries and Galloway want their children tested, and they are entitled to know where they stand.
Many of us are deeply anxious about illiteracy and the fact that we are short of statistics about it. Do all our children have a fair chance of being educated to a standard of literacy and numeracy that will enable them to go into further education? If we do not know the statistics, it is difficult to know how important the tests are in showing up levels of literacy——

Mrs. Margaret Ewing: Get on with it.

Sir Hector Monro: There is no point in the hon. Lady champing at the bit: she is not going to get into the debate anyway.
We shall not make much progress in raising standards of education in Scotland—the whole objective of the testing system—if there is bickering between the Government and authorities. We should all concentrate on one aspect alone—raising the quality of education throughout our primary and secondary schools.

Mrs. Margaret Ewing: Although there is a great deal that I wish to debate, of necessity I must curtail my speech. It is a tragedy that a matter of great importance to the Scottish education system has been compressed into such a short debate. That surely spells out more strongly than ever the case for a Scottish Parliament in which we could address such issues, or at least a Scottish Select Committee in which we could debate Scottish education.
The Minister's speech in Committee on the Self-Governing Schools Etc. (Scotland) Bill, reported in columns 1373–74 of the Official Report of the First Standing Scottish Committee, now rings extremely hollow because he said that he hoped that he would be able to implement national testing with support from all quarters and that he would be able to introduce it without resorting to legislation. It is clear from all the opinion polls in Scotland that there is widespread condemnation of aspects of the suggested testing. That condemnation was voiced by teachers and parents and by no less a figure than Ian Morris, the former chief inspector of primary schools, who said in The Times Educational Supplement that the grounds were "educationally unsound" because
the scheme of national testing currently advocated is reductionist and a product of structuralism.
Perhaps the Minister will comment on that.
I wish to pose three brief questions to the Minister. He spoke about the possibility of action being taken against teachers who would not implement the tests. Will he spell out exactly what kind of action he has in mind? Secondly, what is the amount of the additional funding for learning support? In answer to my previous questions, he said that when working paper No. 4 on assessment had completed its consultation process he would be able to advise us on the amount of additional funding to be provided for learning support and diagnostic testing. Finally, when will the booklet on reporting from the review and development group emerge? That is a critical part of the jigsaw that the Minister is trying to complete.
The debate has not given us enough time to address the education aspects of this legislation. Scottish teachers and parents will be sad about the fact that we could not devote more time to this matter.

Mr. Tony Worthington: It has taken nearly six months to have this debate. That is regrettable, but one of the great advantages of the delay is that it has given us the opportunity to debate the issue on the basis of fact rather than theory. The fact is that where parents have had a choice they have overwhelmingly rejected the tests and the thinking behind them. I commend those ordinary parents from across the political spectrum and from all parts of Scotland who have spontaneously organised to say that they do not want the tests.
We have seen the consequences of pushing the law beyond a reasonable consensus. In 1988 the Government's consultation paper on testing produced 1,000 responses. Lothian Parent Action Group found that 3 per cent. were in favour of the Government's proposals and the Church of Scotland education committee found that 2 per cent. were in favour. Nevertheless, the Government went ahead.
On this issue as on others, the Labour party greatly stresses the importance of obeying the law, and it has never deviated from the argument that there is a duty on the local authorities to test. There is no doubt about that.
Everything that parents and local authorities have done has been with legal advice, which has been that it was within parents' power to withdraw their children from the tests. The Government have not produced anything against that. The legal advice given by Lothian, Strathclyde and local authorities generally shows that parents have the power to withdraw their children.
The tragic factor in this issue is that there is so much consensus and agreement that would improve standards in Scottish primary schools and improve the quality of information available to parents. We support the five-to-14 programme.
There is agreement that there needs to be continuous assessment and the setting of high standards. There is agreement that much better quality information needs to go to homes, and that the assessment of an achievement programme is an important element.
However, everyone has seen through the Minister of State on the subject of choice. He has promulgated the importance of parental choice up and down the country, but on the important issue—where we agree that parents should have a choice in law over the tests—will the Minister unambiguously give choice to the parents who have withdrawn their children?
All over the country, there has been massive rejection of the tests. In the city of Glasgow nearly 80 per cent. of parents have withdrawn their children, saying that they are against the tests. The other 20 per cent. are not for the tests but include those who have said nothing.
The Minister claims support from parents on the basis of an NVA survey, but the man in charge of the research, John McBeth, said that primary national testing does not have majority parental support. Parents are keen on tests that have information for diagnostic purposes, but not ones that label their children for the rest of their school lives.
A week last Sunday, the MORI poll in The Sunday Times—the "Chester Street Bugle", the Tory party house magazine—showed that 80 per cent. of parents in Scotland believe that there should be a choice allowing their children not to do the tests. If the Minister had any sense, he would abandon the tests that have already been abandoned by the parents. There is no question but that the Labour party will abandon the tests. Will the Minister see sense and abandon them?

Mr. Michael Forsyth: rose——

Mr. Deputy Speaker: Does the Minister have the leave of the House to speak again?

Hon. Members: No.

Mr. Deputy Speaker: Leave withheld.

Mr. Thomas Graham: I am 47 years old, but I can remember the day when the house master read out results to the school classroom and three or four young girls broke their hearts because they did not get the marks needed for further education. That is the fate to which the Minister is consigning our children.
In my constituency, most of the primary schools have clearly rejected the Government's proposals. In one of the primary schools, the votes for testing were 40, against testing were 86, so 67 per cent. of the school's parents were totally opposed to the testing. In another school, nearly 70 per cent. of the parents were opposed to the national testing.
This issue is similar to the poll tax. The Government do not listen to the men and women in the country, who vote to bring in trash such as the Government. A Government who do not listen to the ordinary men and women are not fit to govern this country. National testing should be stopped now.

Mr. Peter Bottomley: We have not heard the Opposition's spokesmen explain why they oppose testing. We did not hear from the hon. Member for Clydebank and Milnagavie (Mr. Worthington), who has teaching experience, how the Opposition would monitor assessment. I heard something similar to the arguments advanced by the Opposition's spokesmen before the William Tyndale primary school disaster in inner London, when everyone said that continuous assessment worked. It was not until two thirds of the children had been withdrawn from the school that the education authority introduced any changes.
The education authority in London used to welcome every Scottish teacher because Scottish teachers had the reputation of being interested in achievement. That was when we had a Labour-controlled education authority. No doubt, it was similar to the ones that we have heard about, which will test——

It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Order [22 March]:—

The House divided: Ayes 187, Noes 251.

Division No. 110]
[11.30 pm


AYES


Abbott, Ms Diane
Hardy, Peter


Adams, Mrs Irene (Paisley, N.)
Harman, Ms Harriet


Allen, Graham
Haynes, Frank


Anderson, Donald
Healey, Rt Hon Denis


Archer, Rt Hon Peter
Henderson, Doug


Armstrong, Hilary
Hinchliffe, David


Ashton, Joe
Hoey, Ms Kate (Vauxhall)


Banks, Tony (Newham NW)
Hogg, N. (C'nauld &amp; Kilsyth)


Barnes, Harry (Derbyshire NE)
Home Robertson, John


Barron, Kevin
Hood, Jimmy


Battle, John
Howarth, George (Knowsley N)


Beckett, Margaret
Howells, Dr. Kim (Pontypridd)


Beith, A. J.
Hughes, John (Coventry NE)


Benn, Rt Hon Tony
Hughes, Robert (Aberdeen N)


Bennett, A. F. (D'nt'n &amp; R'dish)
Hughes, Roy (Newport E)


Benton, Joseph
Hughes, Simon (Southwark)


Bermingham, Gerald
Illsley, Eric


Bidwell, Sydney
Ingram, Adam


Blunkett, David
Kennedy, Charles


Boateng, Paul
Kirkwood, Archy


Boyes, Roland
Lambie, David


Bradley, Keith
Lamond, James


Bray, Dr Jeremy
Leadbitter, Ted


Brown, Nicholas (Newcastle E)
Leighton, Ron


Brown, Ron (Edinburgh Leith)
Lestor, Joan (Eccles)


Bruce, Malcolm (Gordon)
Lewis, Terry


Buckley, George J.
Lloyd, Tony (Stretford)


Caborn, Richard
Lofthouse, Geoffrey


Callaghan, Jim
Loyden, Eddie


Campbell, Menzies (Fife NE)
McAllion, John


Campbell-Savours, D. N.
McCartney, Ian


Canavan, Dennis
Macdonald, Calum A.


Carlile, Alex (Mont'g)
McFall, John


Clark, Dr David (S Shields)
McKay, Allen (Barnsley West)


Clarke, Tom (Monklands W)
McKelvey, William


Clwyd, Mrs Ann
McLeish, Henry


Cohen, Harry
Maclennan, Robert


Cook, Robin (Livingston)
McMaster, Gordon


Cousins, Jim
McNamara, Kevin


Crowther, Stan
McWilliam, John


Cryer, Bob
Madden, Max


Cummings, John
Mahon, Mrs Alice


Cunliffe, Lawrence
Marek, Dr John


Dalyell, Tam
Marshall, David (Shettleston)


Darling, Alistair
Martin, Michael J. (Springburn)


Davies, Ron (Caerphilly)
Martlew, Eric


Davis, Terry (B'ham Hodge H'l)
Maxton, John


Dewar, Donald
Meacher, Michael


Dixon, Don
Meale, Alan


Doran, Frank
Michael, Alun


Duffy, A. E. P.
Michie, Mrs Ray (Arg'l &amp; Bute)


Dunnachie, Jimmy
Mitchell, Austin (G't Grimsby)


Dunwoody, Hon Mrs Gwyneth
Moonie, Dr Lewis


Eadie, Alexander
Morgan, Rhodri


Evans, John (St Helens N)
Morley, Elliot


Ewing, Mrs Margaret (Moray)
Mowlam, Marjorie


Fearn, Ronald
Mullin, Chris


Field, Frank (Birkenhead)
Murphy, Paul


Flannery, Martin
Nellist, Dave


Flynn, Paul
Oakes, Rt Hon Gordon


Foster, Derek
O'Brien, William


Fraser, John
O'Neill, Martin


Fyfe, Maria
Orme, Rt Hon Stanley


Galbraith, Sam
Parry, Robert


Galloway, George
Patchett, Terry


Garrett, John (Norwich South)
Pendry, Tom


Garrett, Ted (Wallsend)
Pike, Peter L.


George, Bruce
Prescott, John


Gilbert, Rt Hon Dr John
Primarolo, Dawn


Godman, Dr Norman A.
Quin, Ms Joyce


Golding, Mrs Llin
Radice, Giles


Gould, Bryan
Randall, Stuart


Graham, Thomas
Redmond, Martin


Grant, Bernie (Tottenham)
Reid, Dr John


Griffiths, Nigel (Edinburgh S)
Richardson, Jo


Griffiths, Win (Bridgend)
Robertson, George


Grocott, Bruce
Rogers, Allan






Rooney, Terence
Wallace, James


Ross, Ernie (Dundee W)
Wardell, Gareth (Gower)


Ruddock, Joan
Wareing, Robert N.


Salmond, Alex
Watson, Mike (Glasgow, C)


Sedgemore, Brian
Welsh, Andrew (Angus E)


Sheerman, Barry
Welsh, Michael (Doncaster N)


Shore, Rt Hon Peter
Williams, Rt Hon Alan


Short, Clare
Williams, Alan W. (Carm'then)


Sillars, Jim
Wilson, Brian


Skinner, Dennis
Winnick, David


Smith, Andrew (Oxford E)
Wise, Mrs Audrey


Smith, C. (Isl'ton &amp; F'bury)
Worthington, Tony


Smith, Rt Hon J. (Monk'ds E)
Wray, Jimmy


Smith, J. P. (Vale of Glam)
Young, David (Bolton SE)


Soley, Clive



Spearing, Nigel
Tellers for the Ayes


Steel, Rt Hon Sir David
Mr. Thomas McAvoy and


Strang, Gavin
Mr. Ken Eastham.


Thompson, Jack (Wansbeck)





NOES


Aitken, Jonathan
Favell, Tony


Alexander, Richard
Fenner, Dame Peggy


Alison, Rt Hon Michael
Field, Barry (Isle of Wight)


Allason, Rupert
Finsberg, Sir Geoffrey


Amess, David
Fishburn, John Dudley


Amos, Alan
Fookes, Dame Janet


Arbuthnot, James
Forman, Nigel


Arnold, Jacques (Gravesham)
Forsyth, Michael (Stirling)


Ashby, David
Fowler, Rt Hon Sir Norman


Aspinwall, Jack
Fox, Sir Marcus


Atkinson, David
Franks, Cecil


Baldry, Tony
Freeman, Roger


Banks, Robert (Harrogate)
French, Douglas


Bellingham, Henry
Fry, Peter


Bendall, Vivian
Gale, Roger


Bennett, Nicholas (Pembroke)
Garel-Jones, Tristan


Benyon,W.
Gill, Christopher


Bevan, David Gilroy
Glyn, Dr Sir Alan


Biffen, Rt Hon John
Goodhart, Sir Philip


Blackburn, Dr John G.
Goodlad, Alastair


Blaker, Rt Hon Sir Peter
Goodson-Wickes, Dr Charles


Bonsor, Sir Nicholas
Gorman, Mrs Teresa


Boscawen, Hon Robert
Gorst, John


Boswell, Tim
Grant, Sir Anthony (CambsSW)


Bottomley, Peter
Greenway, Harry (Ealing N)


Bottomley, Mrs Virginia
Greenway, John (Ryedale)


Bowden, Gerald (Dulwich)
Gregory, Conal


Bowis, John
Griffiths, Peter (Portsmouth N)


Boyson, Rt Hon Dr Sir Rhodes
Grist, Ian


Brandon-Bravo, Martin
Ground, Patrick


Brazier, Julian
Grylls, Michael


Bright, Graham
Hague, William


Brown, Michael (Brigg &amp; Cl't's)
Hamilton, Hon Archie (Epsom)


Bruce, Ian (Dorset South)
Hamilton, Neil (Tatton)


Budgen, Nicholas
Hampson, Dr Keith


Burns, Simon
Hannam, John


Burt, Alistair
Hargreaves, A. (B'ham H'll Gr')


Carlisle, Kenneth (Lincoln)
Hargreaves, Ken (Hyndburn)


Carrington, Matthew
Harris, David


Cash, William
Haselhurst, Alan


Chapman, Sydney
Hawkins, Christopher


Chope, Christopher
Hayhoe, Rt Hon Sir Barney


Churchill, Mr
Hayward, Robert


Clark, Rt Hon Sir William
Heathcoat-Amory, David


Coombs, Simon (Swindon)
Hicks, Mrs Maureen (Wolv' NE)


Cran, James
Higgins, Rt Hon Terence L.


Currie, Mrs Edwina
Hill, James


Davies, Q. (Stamf'd &amp; Spald'g)
Hogg, Hon Douglas (Gr'th'm)


Davis, David (Boothferry)
Holt, Richard


Day, Stephen
Howard, Rt Hon Michael


Devlin, Tim
Howell, Ralph (North Norfolk)


Dorrell, Stephen
Hughes, Robert G. (Harrow W)


Douglas-Hamilton, Lord James
Hunt, Rt Hon David


Dover, Den
Hunt, Sir John (Ravensbourne)


Durant, Sir Anthony
Hunter, Andrew


Eggar, Tim
Irvine, Michael


Evans, David (Welwyn Hatf'd)
Jack, Michael


Evennett, David
Janman, Tim


Fallon, Michael
Jessel, Toby





Johnson Smith, Sir Geoffrey
Rathbone, Tim


Jones, Gwilym (Cardiff N)
Renton, Rt Hon Tim


Jones, Robert B (Herts W)
Rhodes James, Robert


Jopling, Rt Hon Michael
Riddick, Graham


Kellett-Bowman, Dame Elaine
Roberts, Sir Wyn (Conwy)


Key, Robert
Rowe, Andrew


Knapman, Roger
Ryder, Rt Hon Richard


Knight, Greg (Derby North)
Sackville, Hon Tom


Knox, David
Sayeed, Jonathan


Latham, Michael
Shaw, David (Dover)


Lawrence, Ivan
Shaw, Sir Giles (Pudsey)


Lennox-Boyd, Hon Mark
Shelton, Sir William


Lester, Jim (Broxtowe)
Shephard, Mrs G. (Norfolk SW)


Lightbown, David
Shepherd, Colin (Hereford)


Lilley, Rt Hon Peter
Shepherd, Richard (Aldridge)


Lloyd, Sir Ian (Havant)
Shersby, Michael


Lloyd, Peter (Fareham)
Sims, Roger


Lord, Michael
Skeet, Sir Trevor


Luce, Rt Hon Sir Richard
Smith, Tim (Beaconsfield)


Lyell, Rt Hon Sir Nicholas
Soames, Hon Nicholas


Macfarlane, Sir Neil
Speed, Keith


MacGregor, Rt Hon John
Speller, Tony


MacKay, Andrew (E Berkshire)
Spicer, Sir Jim (Dorset W)


Maclean, David
Spicer, Michael (S Worcs)


McLoughlin, Patrick
Squire, Robin


McNair-Wilson, Sir Patrick
Stanbrook, Ivor


Madel, David
Stanley, Rt Hon Sir John


Malins, Humfrey
Steen, Anthony


Mans, Keith
Stern, Michael


Maples, John
Stevens, Lewis


Marland, Paul
Stewart, Allan (Eastwood)


Marshall, Sir Michael (Arundel)
Stewart, Andy (Sherwood)


Martin, David (Portsmouth S)
Stewart, Rt Hon Ian (Herts N)


Mates, Michael
Summerson, Hugo


Maude, Hon Francis
Taylor, Ian (Esher)


Meyer, Sir Anthony
Taylor, John M (Solihull)


Miller, Sir Hal
Taylor, Teddy (S'end E)


Mills, Iain
Thompson, D. (Calder Valley)


Mitchell, Andrew (Gedling)
Thurnham, Peter


Mitchell, Sir David
Tracey, Richard


Moate, Roger
Tredinnick, David


Monro, Sir Hector
Trippier, David


Montgomery, Sir Fergus
Trotter, Neville


Morris, M (N'hampton S)
Vaughan, Sir Gerard


Morrison, Sir Charles
Wakeham, Rt Hon John


Moss, Malcolm
Waldegrave, Rt Hon William


Neale, Sir Gerrard
Walker, Bill (T'side North)


Needham, Richard
Ward, John


Nelson, Anthony
Watts, John


Neubert, Sir Michael
Wells, Bowen


Nicholls, Patrick
Wheeler, Sir John


Nicholson, David (Taunton)
Whitney, Ray


Nicholson, Emma (Devon West)
Widdecombe, Ann


Norris, Steve
Wiggin, Jerry


Onslow, Rt Hon Cranley
Wilkinson, John


Oppenheim, Phillip
Wilshire, David


Page, Richard
Winterton, Mrs Ann


Paice, James
Winterton, Nicholas


Parkinson, Rt Hon Cecil
Wolfson, Mark


Patnick, Irvine
Wood, Timothy


Patten, Rt Hon John
Woodcock, Dr. Mike


Pattie, Rt Hon Sir Geoffrey
Yeo, Tim


Peacock, Mrs Elizabeth
Young, Sir George (Acton)


Porter, Barry (Wirral S)
Younger, Rt Hon George


Porter, David (Waveney)



Portillo, Michael
Tellers for the Noes:


Powell, William (Corby)
Mr. Nicholas Baker and


Price, Sir David
Mr. Timothy Kirkhope.


Raison, Rt Hon Sir Timothy

Question accordingly negatived.

Civil Jurisdiction and Judgments Bill [Lords]

Order for Second Reading read.

Motion made, and Question put forthwith, pursuant to Standing Order No. 90(6) (Second Reading Committees),

That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

BUSINESS OF THE HOUSE

Ordered,
That, at tomorrow's sitting, notwithstanding the provisions of Standing Order No. 14 (Exempted business) and No. 15 (Prayers against Statutory Instruments, &amp;c. (negative procedure)), the Motions in the names of Mr. Secretary Lang and Mr. Neil Kinnock relating to Legal Aid and Advice (Scotland) may be proceeded with, though opposed, for one and a half hours after the first of them has been entered upon, and, if these proceedings have not previously been disposed of, Mr. Speaker shall at the expiry of that period put the Questions necessary to dispose of the Motions in the names of Mr. Secretary Lang.—[Mr. Boswell.]

Ordered,
That, at the sitting on Thursday 18th April, notwithstanding the provisions of Standing Order No. 14 (Exempted business), if proceedings on the Motion in the name of the Prime Minister relating to Agriculture have not previously beeen disposed of, Mr. Speaker shall at Ten o'clock put the Questions necessary to dispose of them, including the Question on any Amendment proposed to the said Motion which he may have selected and which may then be moved, and such Questions may be decided after the expiry of the time for opposed business.—[Mr. Boswell.]

Malta (Memorial)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]

Sir Jim Spicer: I am especially pleased to have the opportunity to speak tonight, because tomorrow afternoon the British-Maltese parliamentary group will be hosting a reception here for the Prime Minister of Malta, Mr. Fenech-Adami. I know that he will read the report of tonight's debate with interest, and will be particularly interested in the Minister's reply.
Given all the horrors that surround us today, highlighted so vividly on our television screens night after night, this may seem to some people rather a strange time for the George Cross island memorial siege bell trust to be set up. The aim of the trust is to fund and provide support, from both Malta and the United Kingdom, for the building of a suitable monument to the gallant people of Malta and all our service men—including many of the 14,650 Maltese who enlisted—ho between 1940 and 1943 lived under siege conditions, facing constant attack from air and sea, as well as suffering great hardship through lack of food and all other basic necessities.
In my view, there can never be a wrong moment to commemorate heroism and sacrifice. What more appropriate time could there be for a monument such as this to be dedicated than 1992, to mark the 50th anniversary of the award of the George Cross to the island of Malta?
I was about 14 in 1940, and served as an air-raid messenger throughout the worst of the bombing raids on London in both 1940 and 1941. They were hard times, and there was little good news to give us comfort. However, I well remember that we all took heart from the example set by Malta, and we were all delighted when the courage and fortitude of all those involved in that siege were recognised in such a unique way by His Majesty King George VI on 15 April 1942, with the award of the George Cross to Malta.
In his message to the people of Malta, His Majesty said:
To honour her brave people, I award the George Cross to the island fortress of Malta to bear witness to a heroism and devotion that will long be famous in history.
Many people believe that that siege was much greater than the many earlier sieges from which Malta suffered.
The award came just after the worst bombing of Malta. Between 24 March and 12 April 1942, more than 2,000 sorties were made by the Germans and the Italians against the Grand harbour, with 1,870 tonnes of bombs dropped. In April 1942, 6,700 tonnes of bombs fell on the island, almost evenly split between the dockyard area and the airfields.
That Maltese ordeal continued until June 1943, but always the morale of the islanders was buoyed up by the, at times, unbelievable bravery of our armed forces, who battled their way through to the island with all the men, material and supplies necessary to sustain resistance to the enemy.
As an aside, I point out that when I read the history of those times I was struck forcibly by the fact that, for a large part of the siege of Malta, many of the Maltese people were genuinely near to starvation. The ration for a service man in those days was 4,000 calories. In Malta that was reduced to 2,000 calories. Dock workers, working


perhaps a 12-hour day under the terrible conditions that I have already described, were reduced to a ration of 1,750 calories a day. The ration for a woman was only 1,500 calories a day. On top of all the bombing and hardship that the Maltese people had to suffer, there was a slow but gradual decline in the well-being of the population, a point that we tend to forget.
After that digression, I return to what our forces did at that time. They fought their way through to the island. The losses in all such operations were appallingly high. They reached a climax in Operation Pedestal in 1942, when a convoy, vital to the survival of Malta, battled to get through to the island. The story of that convoy and the losses sustained by it bear witness to the dedication of our armed forces throughout the battle for Malta. From that one convoy, originally consisting of 14 ships, only five survived to unload in Malta. Nine of them were sunk at sea. Of the five that limped into Malta—limping is, I believe, the right word—about three of them were very severely damaged and only survived because of the work and dedication of the crews of those ships.
The monument, when erected, will commemorate this great page in the history of two island peoples. It must, and indeed it will, be completed by April of next year. The trust has a target figure of £250,000. With the support of His Royal Highness the Duke of Edinburgh as patron and of Admiral of the Fleet Lord Lewin, both of whom served in the Mediterranean during the war, almost £150,000 has already been raised. That figure includes a Foreign and Commonwealth Office commitment of £25,000, for which I know that the officers of the trust are very grateful.
At this point, may I ask my hon. Friend who is to reply to the debate one question? Grateful though the trust is, as are all the trust's friends, for that donation, is there not another Department of State that might consider it right and proper to search in its coffers and find some contribution, however small, towards such a worthy cause? If there were any way in which my hon. Friend could forward such a process in that Department's thinking, I should be deeply grateful to him. I know that life might then be slightly easier for Lord Lewin, who will be on the warpath trying to get money wherever and whenever he can.
We have the wholehearted support of both the British and Maltese Governments for this worthy project. The site—overlooking St. Elmo point—has already been chosen and the impressive monument designed. To date, 167 Members of Parliament have signed early-day motion 366, which relates to the erection of the monument. I can give you a firm assurance, Mr. Deputy Speaker, that many more will do so in the weeks to come.
Finally, I wish to thank my hon. Friend the Minister for the support given thus far by the Foreign and Commonwealth Office. We look forward to continuance—perhaps even extension—of such support before building commences.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): At the outset, I wish to express clearly the British Government's strong support for this project. We welcome this initiative by the George Cross Island Association, and are following its progress closely.
As the House will recall, Malta played a vital strategic role in the second world war. I therefore very much share the view of my hon. Friend the Member for Dorset, West (Sir Jim Spicer) that it is entirely fitting and appropriate that the many who died in the siege of Malta between 1940 and 1943 should be remembered in this way. My hon. Friend has talked of these dire events. I can confirm that during April 1942 alone more bombs fell on Malta than fell on the whole of this country during the worst month of the Battle of Britain.
As my hon. Friend has said, Malta's heroic struggle and survival during that period, which culminated in the unprecedented award to the island of the George Cross by King George VI in April 1942, has rightly been identified as one of the main turning points of the war. The Malta memorial will remind coming generations of the endurance, steadfastness and heroism of the Maltese people, and of the sacrifices made by so many men and women of the allied forces and civilians during the siege.
I therefore happily applaud the George Cross Island Association's imagination, foresight and initiative in seeking to have the memorial ready for unveiling by the fiftieth anniversary of the George Cross award to Malta in April 1992. We are pleased to hear that the Maltese Government are to provide the site for the memorial and construct the monument. We are also glad to learn that the siege bell is likely to be cast in Britain.
The Government believe that it is right to contribute to this worthwhile cause. Therefore, the Foreign and Commonwealth Office made available the £25,000 to which my hon. Friend referred. The Government are not unsympathetic to the view, expressed tonight by my hon. Friend, that more public funds should be made available for this project. However, in our present financial climate, when Government funds are very hard pressed, it would be quite wrong of me to offer any hope of an increased contribution from the Foreign and Commonwealth Office. It is right that the bulk of the funds required should be raised through public subscription. My hon. Friend referred to the excellent start that was made to the siege bell trust appeal following the inaugural presentation at the Imperial War Museum in December last year. The fund-raising committee deserves our full appreciation for its efforts.
Of course, Maltese heroism during the war is not the sum total of our relationship with the island. Many hon. Members will no doubt be aware that formal ties between our two countries go back as far as 1799, when Maltese patriots invited the British to remove Napoleon's troops from the island. Hon. Members are aware of the current visit to London by the Maltese Prime Minister. I congratulate my hon. Friend on his astute timing.
The Government welcome the present Maltese Government's policies aimed at securing Malta's links with western countries that share the same democratic values and traditions. In this context, we have noted Malta's bid to become a member of the European Community. Equally, we have valued its renewed and vigorous role in such forums as the Council of Europe, the United Nations and the Commonwealth. We shared its disappointment when its bid to be host to this year's Commonwealth Heads of Government meeting was ultimately unsuccessful.
But our relationship is not only a matter of official visits and common interests. Many people in Britain have close links with Malta. Britons go in their thousands to soak up


the Maltese sun and enjoy the island's hospitality and unique historical heritage. In 1990 the number of British tourists to Malta was nearly 500,000.
I am, therefore, delighted that from April next year when, as we know, the siege memorial will be dedicated,

tourists of all nationalities, but in particular those from Britain and the older Commonwealth countries, will be able to visit a new monument which will combine historical interest and poignant remembrance.

Question put and agreed to.

Adjourned accordingly at one minute to Twelve o'clock.